–Imports Also Jump on Higher Energy Costs, Leading To Trade Deficit
By Max Sato
(MaceNews) – Japanese exports posted a third straight month of a double-digit percentage surge from a year earlier in May, largely in reaction to pandemic-triggered sharp declines from March to August last year, particularly in the second quarter, data released Wednesday by the Ministry of Finance showed.
As in the previous month, Japanese passenger cars and precision machinery drew solid demand from China, the U.S. and Europe, while higher energy and commodities prices pushed up imports, resulting in the first trade deficit in four months.
Demand for chip-making equipment remained healthy amid a global semiconductor upward cycle, while automobile shipments picked up from the recent slide, which was caused by lower vehicle production due to semiconductor shortages.
The key points from the MOF’s Trade Statistics:
* Exports soared 49.6% in May from a year earlier, when the first wave of the pandemic prompted lockdowns and restrictions in many parts of the world, damping global demand. It was the third y/y rise in a row after surging 38.0% in April but was slightly weaker than the median economist forecast of a 51.3% rise. The increase was led by higher shipments of automobiles and auto parts as well as iron and steel.
* Imports also jumped 27.9% y/y, the fourth straight rise after gaining 12.8% in April. The May increase was higher than the median economist forecast of a 26.6% rise. It was led by crude oil, drugs and non-ferrous metals in light of the recent recovery in energy and commodities markets. Japan also relies on imports for coronavirus vaccines.
* The trade balance resulted in a deficit of Y187.1 billion in May, marking the first negative figure in four months, after a surplus of Y253.1 billion the previous month. The gap was wider than the median economist forecast of a Y91.2 billion deficit.
* Exports to China remained strong, up 23.6% from a year earlier in May for the 11th consecutive y/y rise, with the pace of increase decelerating from +33.8% in April. The increase was led by strong demand for semiconductor-producing equipment, automobiles and raw materials.
* Japanese exports to Asia as whole marked the third straight y/y rise, up 32.5% on year in May after surging 32.7% in April.
* Exports to the U.S. jumped 87.9%, the third y/y gain in a row, following +45.1% the previous month, largely in reaction to a 50.6% plunge in May 2020. The increase was led by automobiles, auto parts and engines, as seen in April.
* Shipments to Europe also posted the third consecutive y/y rise, up 69.6% on year after +39.5% in April, thanks to firm demand for automobiles and auto parts as well as machinery including pumps and centrifuges.