–Japan Posts 18th Straight Month of Trade Deficit on High Oil, Gas Import Costs
–Exports to China Mark 2nd Straight Y/Y Drop Amid Renewed Covid Spike
By Max Sato
(MaceNews) – Growth in Japanese export values slowed to a single-digit percentage rise in January amid slowing global demand and suspended shipments during the Lunar New Year holidays in some parts of Asia, leading to a record high trade deficit, data released Thursday by the Ministry of Finance showed.
The pace of imports also slowed in line with softer international energy markets. The yen’s recent modest rebound is helping ease high import costs to some extent.
Shipments to China, the key export market for Japanese goods, posted their second straight year-over-year decline as the world’s second-largest economy has been hit by the resurgence of the pandemic since Beijing lifted its strict zero-Covid public health rules in December.
Rush shipments of goods ahead of the Jan. 22 lunar new year (compared to Feb. 1 in 2022) and suspended cargo handling and customs clearance in China, Taiwan and Hong Kong during their new year holidays are believed to have caused a distortion to export and import patterns.
The key points from the MOF’s Trade Statistics:
* Export values rose just 3.5% on the year in January for the 23rd straight rise, with the pace of increase decelerating further from 11.5% in December, 20.0% in November and 25.3% in October. It was firmer than the median forecast of a 0.1% fall (forecasts ranged from a 3.0% drop to an 8.5% rise). Export growth was also slow at 9.6% in January 22 due to irregular trade flows ahead of the lunar new year holidays. In October 2022, exports rose 25.3% to a record high of ¥9.0 trillion.
* Amid slowing global economic growth, export volumes fell 11.5% on the year for the fourth straight drop after falling 7.1% in December, 3.6% in November, edging down 0.3% in October and rising 7.3% in September.
* The increase in January export values was led by the recent pickup in automobile shipments, thanks to easing global supply constraints, and solid demand construction and mining equipment as well as mineral fuels, all as seen in the previous month. Exports of auto parts, semiconductor-producing equipment and plastics fell in January.
* Import values rose 17.8% on the year in January for the 24th straight increase, coming in lower than the median forecast of a 19.9% rise. It followed increases of a revised 20.7% in December, 30.3% in November and 53.7% to ¥11.18 trillion in October, which was a record high amount for the eighth consecutive month.
* Import volumes fell 2.4% in January after falling 6.4% in December and 4.6% in November and rebounding 5.6% in October.
* The trade balance came to a record high deficit of ¥3.497 trillion (¥3,496.6 billion) in January. It marked the 18th straight month of a shortfall after a revised deficit of ¥1.452 trillion (¥1,451.8 billion) in December, surpassing the previous record high shortfall of ¥2.823 trillion in August 2022. It compares to a deficit of ¥2.199 trillion (¥2,199.4 billion) in January 2022. The gap was narrower than the consensus forecast of a ¥3.87 trillion (¥3,869.9 billion).
* Exports to China, one of the top export destinations for Japanese goods, fell 17.1% on the year in January after posting their first drop in seven months in December with a 6.2% drop, following increases of 3.5% in November and 7.7% in October. The decrease was led by automobiles, auto parts and semiconductor-producing equipment, as seen in the previous month. Shipments to China rose 12.8% to a record high ¥1.78 trillion in July 2022.
* Japanese exports to Asia as whole marked their first year-on-year drop in 23 months, down 4.0% in January, after rising 4.1% in December, 11.6% in November and 16.6% in October. The decrease was led by plastics, auto parts and chip-making equipment. Shipments of mineral fuels increased.
* Exports to the U.S., which have exceeded exports to China since October, recorded the 16th straight year-on-year rise, up 10.2% in January. The pace of increase slowed from 16.9% in December, 32.6% in November and 36.6% to a record high of ¥1.78 trillion in October. The increase was led by construction and mining equipment, metalworking machinery and iron and steel. Shipments of semiconductor-producing equipment and drugs decreased.
* Shipments to the European Union posted the 23rd straight year-on-year increase in January, up 9.5%, following a 27.0% rise in the previous month, led by automobiles, semiconductor-producing equipment and ships. Exports of auto parts declined.