By Max Sato
(MaceNews) – Japanese exports continued rising at a double-digit rate on year in August after the pandemic-triggered 2020 slump, but their momentum lost steam amid global supply chain disruptions and rising Covid-19 cases, data released Thursday by the Ministry of Finance showed.
Demand for Japanese iron and steel as well as semiconductor-producing equipment remained strong while global chip shortages and delayed parts supplies from Southeast Asia put the brakes on production and shipments of passenger cars.
A surge in imports on the back of higher energy costs and the need for more vaccines led to the first trade deficit in three months in August.
The key points from the MOF’s Trade Statistics:
* The increase was led by healthy demand for iron and steel, chip-making equipment and auto parts. On the downside, shipments of automobiles to the U.S. and Europe dipped from a year earlier after a general uptick this year.
* On a seasonally adjusted basis, exports were up 0.8% in August from the previous month, the MOF said. The Bank of Japan’s real export index rose a seasonally adjusted 1.7% on month in July, the second straight monthly rise after +0.7% in June and -0.3% in May. The BOJ will release its real trade indexes for August at 1400 JST (0500 GMT) Thursday.
* Imports surged 44.7% on year in August, the seventh straight rise after gaining 28.5% in July and 32.8% in June. The pace of increase exceeded the median economist forecast of a 40.0% rise. Imports were led by crude oil, medicine and liquefied natural gas.
* The trade balance resulted in a deficit of Y635.4 billion in August, marking the first negative figure in three months, after a surplus of Y439.4 billion the previous month. The gap was much wider than the consensus call of a Y47.4 billion deficit.
* Exports to China, the top export destination for Japan, remained solid, up 12.6% from a year earlier in August for the 14th consecutive y/y rise, with the pace of increase decelerating from 18.9% in July and 27.7% in June. The increase was led by solid demand for organic compounds (cosmetics), plastics and electronic parts and devices.
* Japanese exports to Asia as whole marked the sixth straight y/y rise, up 26.1%, with the pace of growth also slowing from 32.5% in July and 37.1% in June.
* Exports to the U.S., another key market, rose 22.8% on year in August, the sixth consecutive gain rising 26.8% in July and surging 85.5% in June. The increase was led by engines and auto parts as well as construction and mining machinery.
* Shipments to the European Union also posted the sixth straight y/y rise, up 29.9% on year after gaining 46.1% in July and 51.1% in June, backed by reopening demand for iron and steel, engines and construction and mining machinery.