TOKYO (Reuters) – Japan’s exports fell for a third straight month in February in a sign of growing strain on the trade-reliant economy from slowing external demand and a Sino-U.S. tariff war.

Ministry of Finance data showed on Monday exports fell 1.2 percent year-on-year in February, more than a 0.9 percent decrease expected by economists in a Reuters poll.

It followed a sharp 8.4 percent year-on-year drop in January, marking a third straight month of falls due to declines in shipments of semiconductor production equipment and cars.

The trade data comes on top of a recent batch of weak indicators, such as factory output and a key gauge of capital spending, which have raised worries that a record run of postwar growth may come to an end. Some analysts say a recession cannot be ruled out.

The Bank of Japan last week cut its view on exports and output, while keeping policy unchanged. Yet, extended weakness in exports could put it under pressure to deliver more easing, especially as inflation remains well off its 2 percent target and pressure on businesses and consumers continues to rise.

Slowing global growth, the Sino-U.S. trade war and complications over Britain’s exit from the European Union have forced policy makers around the world to shift to an easing stance over recent months.

The trade war between the United States and China – Japan’s largest export markets – has already curbed global trade.

Monday’s trade data showed exports to China, Japan’s biggest trading partner, rose 5.5 percent year-on-year, rebounding from a 17.4 percent drop in January. However, overall trade to the Asian giant remained weak, as even after averaging effects of the Lunar New Year holiday, China-bound shipments declined 6.3 percent in the January-February period from a year earlier.

Japan’s shipments to Asia, which account for more than half of overall exports, fell 1.8 percent, down for a fourth straight month.

U.S.-bound exports rose 2.0 percent, but imports from the United States grew 4.9 percent, resulting in Japan’s trade surplus with the country declining 0.9 percent year-on-year to 624.9 billion yen in February.

Japan’s still-large surplus with the United States raises concerns among Japanese policymakers and auto exporters that Washington may impose hefty duties on its imports, analysts say.

Imports of Japanese cars make up about two-thirds of Japan’s $69 billion annual trade surplus with the United States, making Tokyo and Beijing targets of criticism by Trump.

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