–Export Volumes Down After 1st Y/Y Gain in 12 Months in September
–Imports Mark 7th Straight Y/Y Fall on Easing Energy Prices
–Exports to China Show 11th Straight Y/Y Drop on Chips, Iron/Steel
By Max Sato
(MaceNews) – Japanese export values posted their second straight year-over-year increase in October, rising a stronger-than-expected 1.6% to the second highest amount on record on continued solid demand for automobiles, but shipments to the world slowed after climbing 4.3% to a record high in September as credit tightening by major central banks is dampening demand for electronic parts and devices, data released Thursday by the Ministry of Finance showed.
Import values fell on the year for the seventh straight month, down 12.5%, as energy costs have eased from last year’s spike, while the pace of decrease decelerated from September’s revised 16.4 percent dip amid recovering domestic demand, which in turn pushed the trade balance back into a deficit worth ¥662.5 billion, following a revised ¥72.1 billion surplus in September and a large ¥2.17 trillion deficit seen a year earlier.
Shipments to China, one of the key export markets for Japanese goods, posted their 11th straight year-over-year decline in October, led by drops in semiconductors and iron and steel, although shipments of chip-making equipment were up after rebounding the previous month.
The key points from the MOF’s Trade Statistics:
* Export values rose 1.6% on the year to ¥9.15 trillion, the second highest on record, in October after rising 4.3% to a record high of ¥9.20 trillion in September. Previously, exports fell 0.8% in August and edged down 0.3% in July, which was the first drop in 29 months. Exports have slowed from double-digit percentage gains seen last year. The increase was larger than the median forecast of a 0.6% rise (forecasts ranged from being flat to a 2.8% gain). It was led by higher shipments of automobiles, ships and construction/mining equipment, offsetting a continued drop in semiconductor-producing equipment.
* Export volumes fell 3.3% on the year in October after rising 0.7% in September for the first rise in 12 months and falling 5.3% in August.
* Import values fell 12.5% on the year in October for the seventh straight decrease after falling a revised 16.4% in September and 17.7% in August and marking their first decline in 27 months with a 2.3% drop in April. It was larger than the median forecast of a 11.9% fall (forecasts ranged from 13.0% to 9.2% drops). The decrease was led by coal, liquefied natural gas and crude oil as the prices for energy remain below year-earlier levels.
* Import volumes dipped 3.2% on year in October for the 12th straight decrease after sliding 2.6% in September and 7.3% in August.
* The trade balance came to a deficit of ¥662.5 billion in October after chalking up an unexpected surplus of a revised ¥72.09 billion in September and a ¥943.2 billion deficit in August. It compared with the consensus forecast of a ¥688.4 billion deficit (forecasts ranged from ¥1.09 trillion to ¥437.0 billion deficits), a record high deficit of ¥3.51 trillion hit in January and a large ¥2.17 trillion deficit seen a year earlier. The ¥39.2 billion surplus in June was the first positive figure in 23 months.
* Exports to China, one of the top export destinations for Japanese goods, fell 4.0% on the year in October for the 11th straight decline. It followed decreases of 6.2% in September and 11.0% in August and their first drop in seven months in December 2022 with a 6.2% drop. The decline was led by declines in shipments of semiconductors and other electronic parts as well as iron and steel. Exports of semiconductor-producing equipment were up. 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 slipped 5.3% in October for the 10th straight drop, following a 4.3% drop in September and their first year-on-year drop in 23 months in January, down 4.0%. The decline was led by semiconductor-producing equipment, iron and steel and optical equipment.
* Exports to the U.S., which have exceeded those to China since October 2022, recorded their 25th straight year-on-year rise, up 8.4% in October, following a 13.0% increase in September and a 36.5% surge to a record high of ¥1.78 trillion in October 2022. The increase was led by automobiles, auto parts and construction and mining equipment, as largely seen in recent months.
* Shipments to the European Union posted the 32nd straight year-on-year increase in October, up 8.9%, following a 12.9% rise in September. The increase reflects solid demand for automobiles, ships and construction and mining equipment.