– Exports to China Continue Rising; Shipments to Asia Post Slight Drop
– Demand for Chip-Making Machines Strong; Auto Exports Slowing
By Max Sato
(MaceNews) – Japanese exports posted the first year-on-year drop in three months in February partly in reaction to rush shipments to Asia in January before the Lunar New Year holidays last month, but the pickup trend in exports appears to be intact, backed by solid Chinese recovery demand, data released Wednesday by the Ministry of Finance showed.
Demand for semiconductor-producing equipment continued to be strong amid the global silicon cycle uptrend, while shipments of automobiles, which had initially led a pickup in exports, dipped for the fourth straight month. Semiconductor shortages are forcing Japanese carmakers to trim production.
The key points from the MOF’s Trade Statistics:
* Exports slumped 4.5% on year in February, the first y/y drop in three months after a 6.4% jump in January, coming in much weaker than the median economist forecast of a 0.8% decline. Exports had posted the first rise in 25 months in December. The decrease in February was led by slower shipments of automobiles, mineral fuels and ships, as seen in the previous month. By contrast, exports of semiconductor-producing equipment, plastics and non-ferrous metals to China continued to show strong gains.
* Imports rebounded 11.8% y/y for the first rise in 22 months after slipping 9.5% in January, largely in line with the median economist forecast of a 11.9% rise. The increase was led by telecommunications equipment, clothing and computers. Imports of crude oil continued falling from a year earlier.
* The trade balance came to a surplus of Y217.4 billion in February, posting the first positive figure in two months, after a deficit of Y325.4 billion the previous month. The gap was narrower than the median economist forecast of a Y420.0 billion surplus.
* The MOF said exports fell a seasonally adjusted 4.7% on month in February and imports gained 4.7% m/m, resulting in a trade deficit of Y38.7 billion.
* Exports to China rose 3.4% from a year earlier in February for the eighth consecutive y/y rise after surging 37.5% in January. The increase was led by strong demand for semiconductor-making machines, non-ferrous metals and plastics. The pace of y/y increase in January was well above the recent average, partly because there were rush shipments before the week-long Lunar New Year holidays in China starting on Feb. 11. Last year, the New Year holidays were from Jan. 24 to Feb. 2.
* Japanese exports to Asia as whole marked the first y/y drop in three months, down 0.8% on year after +19.4% in January. The slight decline was led by ships, mineral fuels and textiles. Demand for semiconductor-making machines and plastics remained solid.
* Exports to the U.S. posted the fourth consecutive y/y drop, down 14.0% last month, after dipping 4.8% the previous month. Shipments of automobiles, aircraft and engines declined.
* Demand from Europe remained sluggish. Exports to the EU fell 3.3% for the 19th consecutive y/y decrease after falling 1.6% in January. The decrease was led by slower shipments of automobiles, engines and construction machinery, while exports of heavy electrical machines and organic compounds (cosmetics) showed sharp increases.