According to a recent Reuters poll, Japan’s exports are set to fall for the eighth consecutive month in July as the US-China trade war rages on with no resolution in sight. To add to the woes, core consumer inflation is also forecast to remain at two-year lows in July.

According to economists’ forecast, Japanese exports are set to decline by 2.2% in July YoY, which would come in slightly better than the 6.6% decline seen during the previous month. Japan’s export-reliant economy has been hit hard by the trade war as China is one of its most important trading partners.

Economists polled also forecast that imports could decline by 2.7% YoY in July 2019, which could cause the overall trade deficit to touch 200 billion yen. In June, the trade balance had reported a surplus of 589.6 billion yen.

Meanwhile, Japan’s core CPI, which includes oil products and excluding fresh food, is expected to rise 0.6% higher in July YoY, maintaining the same rate of growth seen in June. Overall, the Japanese economy faces severe external risks owing to global trade tensions while the inflation remains well below the target. This could cause the BOJ to step in with further easing measures to support the weakening Japanese economy.