–Imports Mark 3rd Straight Y/Y Fall on Easing Energy Prices
–Japan Posts 1st Trade Surplus in 23 Months on Sharp Import Drop
–Exports to China Record 7th Straight Y/Y Drop on Iron and Steel, Semiconductors
By Max Sato
(MaceNews) – Japanese export values posted a modest rise on the year in June as recovering supply chains supported automobile shipments to the U.S. and Europe but volumes continued to shrink on sluggish global demand for semiconductors and iron and steel, data released Thursday by the Ministry of Finance showed.
Import values fell on the year for the third month in a row after recording their first drop in 27 months in April amid easing energy and commodities prices following last year’s spike.
A double-digit percentage drop in imports led to Japan’s first trade surplus in 23 months in June, compared to large deficits seen in the previous month and a year earlier. The trade balance hit a record shortfall in January this year, a month when trade flows tend to be irregular around the lunar new year holidays in some parts of Asia.
Shipments to China, the key export market for Japanese goods, posted their seventh straight year-over-year decline in June, led by declines in iron and steel, semiconductors and other electronic parts as well as non-ferrous metals, as largely seen in the previous month. The world’s second-largest economy is struggling to recover from the downtime during Beijing’s strict zero-Covid policy, which was lifted in December.
The key points from the MOF’s Trade Statistics:
* Export values rose 1.5% on the year in June for the 28th straight increase after edging up 0.6% in May and rising 2.6% in April, 4.3% in March, 6.5% in February and following double-digit percentage gains seen last year. It was slightly weaker than the median forecast of a 2.0% rise (forecasts ranged from 0.8% to 4.0% gains).
* Amid slow global economic growth, export volumes fell 4.8% on the year for the ninth straight drop after falling 6.4% in May.
* The increase in June export values was led by higher shipments of automobiles, construction and mining equipment and ships. Exports of mineral fuels, iron and steel and semiconductor-producing equipment declined.
* Import values slumped 12.9% on the year in June after falling a revised 9.8% in May and marking their first drop in 27 months with a 2.3% drop in April. It was larger than the median forecast of a 11.3% decline (forecasts ranged from 15.0% to 6.9% falls). The decrease was led by crude oil, coal and liquefied natural gas as the prices for energy and commodities have eased.
* Import volumes dipped 6.1% on year in June for the eighth straight decrease after sliding 5.2% in May.
* The trade balance came to a surplus of ¥43.0 billion in June, marking the first surplus in 23 months. It was firmer than the consensus forecast of a ¥47.1 billion deficit (forecasts ranged from a deficit of ¥376.2 billion to a surplus of ¥209.5 billion). The surplus followed a revised ¥1,381.9 billion deficit (¥1.382 trillion) in May and a record high deficit of ¥3,506.4 billion hit in January. It compared with a deficit of ¥1,375.0 billion (¥1.380 trillion) in June 2022.
* Exports to China, one of the top export destinations for Japanese goods, fell 11.0% on the year in June after falling 3.4% in May, 2.9% in April, 7.7% in March, 10.9% in February, 17.1% in January and posting their first drop in seven months in December with a 6.2% drop. The decrease was led by lower demand for iron and steel, semiconductors and other electronic parts as well as non-ferrous metals. 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 dipped 8.4% in June for the sixth straight drop, following decreases of 8.1% in May, 6.3% in April, 1.1% in March and 1.3% in February and their first year-on-year drop in 23 months in January, down 4.0%. The decline was led by iron and steel, electronic parts and semiconductor-producing equipment.
* Exports to the U.S., which have exceeded those to China since October 2022, recorded their 21st straight year-on-year rise, up 11.7% in June, following increases of 9.4% in May, 10.5% in April, 9.4% in March and 14.9% in February and a 36.5% surge to a record high of ¥1.78 trillion in October 2022. The increase was led by automobiles, construction and mining equipment as well as heavy electrical equipment (turbines, transformers, etc.). Shipments of semiconductor-producing equipment and mineral fuels declined.
* Shipments to the European Union posted the 28th straight year-on-year increase in June, up 15.0%, following increases of 16.6% in May, 11.8% in April, 5.1% in March, 18.6% in February and 9.5% in January. The increase reflects solid demand for automobiles, ships and motorcycles.