Taiwan’s export orders rose just 3.1% in June from a year earlier, less than half the growth seen in May and short of the 12.3% pace expected, amid a plunge in business with Japan.

Orders from Japan slumped 9.2%, the Ministry of Economic Affairs said, a possible sign that the weak yen is leading buyers in the country to cut back. Orders from the ASEAN region were up just 0.2% after double-digit gains in the first five months of the year. 

The disappointing data comes less than two weeks after Taiwan reported total goods exports rose 23.5% in June, with shipments of certain high-tech products jumping more than fourfold.

But the latest data may add to concern about prospects for the export-dependent economy, where the benchmark Taiex closed 2.7% lower on Monday, completing the biggest four-day decline since 2022. Taiwan Semiconductor Manufacturing Co. dropped for a fourth day amid concerns about the tech outlook and geopolitics. 

“The difference between the soaring export readings and the barely satisfactory export orders is probably due to Taiwan’s structural change in recent years,” said Woods Chen, chief economist of Yuanta Securities Investment Consulting Co. “Taiwan is increasingly redirecting its manufacturing activities back to the island, which might reduce the export orders” from China.

Total orders rose mainly due to strong demand for artificial intelligence, high-performance computing and cloud services, the ministry said in a statement.

“Looking forward, the growth momentum of global trade may be constrained due to US-China trade and geopolitical risks, and as global growth is hit by high interest rates,” it cautioned. 

President Joe Biden’s decision not to seek re-election, along with comments from Republican presidential candidate Donald Trump to Bloomberg, have rattled many investors who track Taiwan. “I think Taiwan should pay us for defense,” Trump said when asked about the US commitment to defend the island. “Why are we doing this?” 

Both US presidential candidates pose a threat to the semiconductor sector in Taiwan, particularly TSMC,” said Kiyong Seong, lead Asia macro strategist at Societe Generale. “Additionally, Trump’s criticism of Taiwan’s small contribution to defense, as he describes it, has added a bearish bias to the Taiwan dollar.”

The benchmark stock index has dropped 8.8% from a peak reached earlier this month. The Taiwan dollar also fell 0.4% at the close Monday, the lowest since March 2016, as overseas investors sold a net NT$9.2 billion of shares.

Orders for electronics rose 6.3%, but electrical products, textiles and transport equipment all fell. Still, separate data from the statistics bureau in Taipei showed unemployment stable at just 3.3%, while Friday data showed the Taiwan housing price index rose 9.3%, the fastest since the third quarter of 2022.