–Imports Mark 4th Straight Y/Y Fall on Generally Easing Energy Prices
–Japan Trade Balance Unexpectedly Slips Back into Deficit After 1st Surplus in 23 Months in June
–Exports to China Record 8th Straight Y/Y Drop due to Declines in Autos, Semiconductors, Iron and Steel
By Max Sato
(MaceNews) – Japanese export values posted their first year-over-year decline in 29 months in July as sluggish global demand for mineral fuels, semiconductor-producing equipment and electronic parts and devices more than offset the impact of recovering automobile shipments, data released Thursday by the Ministry of Finance showed.
Import values fell on the year for the fourth straight month after recording their first drop in 27 months in April as energy and commodities prices have generally eased from last year’s surge.
Japan’s trade balance unexpectedly slipped back into deficit after recording its first surplus in 23 months in June and improving from a record shortfall in January.
Shipments to China, the key export market for Japanese goods, posted their eighth straight year-over-year decline in July, led by declines in automobiles, semiconductors and other electronic parts as well as iron and steel, as largely seen in recent months. The world’s second-largest economy has been struggling to recover from the depth of the pandemic slump, prompting Beijing to take more economic stimulus measures.
The key points from the MOF’s Trade Statistics:
* Export values edged down 0.3% on the year in July for the first drop in 29 months after rising 1.5% in June, 0.6% in May, 2.6% in April, 4.3% in March, 6.5% in February and following double-digit percentage gains seen last year. The decline was smaller than the median forecast of a 1.0% drop (forecasts ranged from a 1.7% fall to a 0.1% rise).
* Amid slowing global economic growth, export volumes fell 3.2% on the year for the 10th straight drop after falling 4.8% in June.
* The decrease in July export values was led by continued declines in mineral fuels and semiconductor-producing equipment while shipments of electronic parts and devices including chips also dropped. Exports of automobiles continued to post a solid gain from a year earlier.
* Import values slumped 13.5% on the year in July after falling 12.9% in June and 9.8% in May and marking their first drop in 27 months with a 2.3% drop in April. It was smaller than the median forecast of a 15.2% decline (forecasts ranged from 16.0% to 14.4% falls). The decrease was led by coal, crude oil and liquefied natural gas as the prices for energy and commodities have eased.
* Import volumes dipped 4.3% on year in July for the ninth straight decrease after sliding 6.1% in June.
* The trade balance came to a deficit of ¥78.7 billion in July after marking the first surplus in 23 months in June. It was weaker than the consensus forecast of a ¥43.7 billion surplus (forecasts ranged from a deficit of ¥80.0 billion to a surplus of ¥162.3 billion). It followed a revised ¥43.1 billion surplus in June and a record high deficit of ¥3.51 trillion hit in January. It compared with a deficit worth ¥1,421.9 billion (¥1.422 trillion) in July 2022.
* Exports to China, one of the top export destinations for Japanese goods, fell 13.4% on the year in July. It followed decreases of a revised 10.9% in June, 3.4% in May, 2.9% in April, 7.7% in March, 10.9% in February, 17.1% in January and their first drop in seven months in December with a 6.2% drop. The decrease was led by lower demand for automobiles, semiconductors and other electronic parts as well as iron and steel, as largely seen in recent months. The recent trend is in stark contrast to the middle of last year, when shipments to China rose 12.8% to a record high ¥1.78 trillion in July 2022.
* Japanese exports to Asia as a whole dipped 13.2% in July for the seventh straight drop, following decreases of 8.4% in June, 8.1% in May, 6.3% in April, 1.1% in March and 1.3% in February, and marking their first year-on-year drop in 23 months in January, down 4.0%. The decline was led by mineral fuels, electronic parts and devices, as well as semiconductor-producing equipment.
* Exports to the U.S., which have exceeded those to China since October 2022, recorded their 22nd straight year-on-year rise, up 13.5% in July, following increases of 11.7% in June, 9.4% in May, 10.5% in April, 9.4% in March and 14.9% in February and a 36.5% surge to a record high of ¥1.78 trillion in October 2022. The increase was led by automobiles and auto parts as well as heavy electrical equipment (turbines, transformers, etc.). Shipments of semiconductor-producing equipment continued to drop.
* Shipments to the European Union posted the 29th straight year-on-year increase in July, up 12.4%, following increases of 15.0% in June, 16.6% in May, 11.8% in April, 5.1% in March, 18.6% in February and 9.5% in January. The increase reflects solid demand for automobiles, construction and mining equipment as well as auto parts.