–Imports Up on Strong Demand for Computers, Engines, Smartphones
–Exports to China Post 7th Straight Y/Y Rise Following Last Year’s Slump
–Exports to US Remain Robust; Those to EU Mark 3rd Straight Y/Y Slip
By Max Sato
(MaceNews) –Japanese export values rose 5.4% for the seventh straight year-over-year increase in June, led by solid demand for semiconductor-making equipment, non-ferrous metals and plastics, but the pace of increase slowed from 13.5% in May and export volumes marked the fifth consecutive drop as the effects of the past rate hikes by major central banks weighed on global growth, data released Thursday by the Ministry of Finance showed.
The pace of export growth came in below the consensus forecast of a 6.1% gain.
Import values rose 3.2% (consensus was a 6.4% rise) in June for the third straight increase after rising 9.5% in May and rebounding 8.4% in April. The increase was led by strong demand for computers, engines and telecommunications equipment (smartphones). Purchases of coal remained below year-earlier levels.
The trade balance recorded a ¥224.0 billion surplus, coming in stronger than the median forecast of a ¥142.3 billion deficit and close to the top end of the forecasts that ranged from a deficit of ¥340.0 billion to a surplus of ¥244.4 billion. It followed a revised ¥1,220.1 billion (¥1.22 trillion) deficit in May and compared with a ¥36.5 billion surplus in June 2023 and a record shortfall of ¥3,506.43 billion (¥3.51 trillion) hit in January 2023.
Shipments to China, a key export market for Japanese goods, posted their seventh straight increase thanks to recovering demand for chip-making equipment and non-ferrous metals amid a gradual pickup in the world’s second-largest economy. Japanese exports to the European Union fell on year for the third straight month, hit by lower demand for automobiles and steel as seen in the prior month. Exports to the U.S. remain robust, up for the 33rd straight month on autos and auto parts, after hitting a record high amount in December 2023.
Japan’s economy marked the first slump in two quarters in January-March, down 2.9% annualized, after it narrowly averted a second straight contraction in the final quarter of 2023. Looking ahead, the economy in April-June is expected to show modest growth of about 2% annualized as auto production resumed in March but more revelations of false safety test records in June, this time at Toyota Motor itself, instead of its subsidiaries, may have slowed overall output. Consumer spending remains sluggish amid elevated costs for food and energy while the outlook for exports remains uncertain.
Other details from the MOF’s Trade Statistics:
* Exports to China, one of the top export destinations for Japanese goods, rose 7.2% on year in June for the seventh straight month after rising 17.8% in May. The increase was led by shipments of semiconductor-producing equipment, non-ferrous metals and automobiles, largely as seen in recent months.
* Japanese exports to Asia as a whole also rose for the seventh consecutive month, up 7.7%, after rising 13.6% in May. The increase was led by high demand for semiconductor-producing equipment, automobiles and non-ferrous metals.
* Exports to the U.S., which have exceeded those to China since October 2022, recorded their 33rd straight year-over-year rise, up 11.0% in June after rising 23.9% in May and soaring 20.2% to a record high of ¥2.08 trillion in December 2023. The increase was led by automobiles and auto parts as well as semiconductor-producing equipment.
* Shipments to the European Union fell 13.4%, partly in payback for a sharp 15.0% gain made a year earlier, after slumping 10.1% in May and falling 2.0% in April for first drop in five months. It was due to continued declines in automobiles as well as iron and steel. Demand for ships also slumped.