–Imports Mark 5th Straight Y/Y Fall on Easing Energy Prices
–Exports to China Record 9th Straight Y/Y Drop due to Declines in Iron and Steel, Mineral Fuels; Semiconductors Rebound
By Max Sato
(MaceNews) – Japanese export values posted a smaller-than-expected drop in August after marking their first year-over-year decline in 29 months in July amid sluggish demand for chip-making equipment, although automobile shipments stayed on recovery track on improved supply chains and solid U.S. and European demand, data released Wednesday by the Ministry of Finance showed.
Import values fell on the year for the fifth straight month after recording their first drop in 27 months in April as energy and commodities prices have generally eased from last year’s surge.
Japan’s trade balance recorded a second straight monthly trade deficit after
unexpectedly slipping back into negative territory in July and showing its first surplus in 23 months in June. The shortfall in August came in wider than expected but was still much narrower than a large deficit seen a year earlier thanks to lower import costs.
Shipments to China, one of the key export markets for Japanese goods, posted their ninth straight year-over-year decline in August, led by declines in iron and steel and mineral fuels, but shipments of semiconductors rebounded. The world’s second-largest economy is still struggling to recover from its pandemic slump.
The key points from the MOF’s Trade Statistics:
* Export values dipped 0.8% on the year in August after edging down 0.3% in July for the first drop in 29 months and rising 1.5% in June. Exports have weakened from double-digit percentage gains seen last year. The decline was much smaller than the median forecast of a 2.3% drop (forecasts ranged from a 5.5% fall to a 2.6% rise).
* Amid slow global economic growth, export volumes fell 5.3% on the year for the 11th straight drop after falling 3.2% in July.
* The decrease in August export values was led by continued declines in mineral fuels and semiconductor-producing equipment as well as a drop in organic compounds used for cosmetics among other products. Exports of automobiles continued to post a sharp gain from year-earlier levels while shipments of electronic parts and devices including chips rebounded.
* Import values slumped 17.8% on the year in August after falling a revised 13.6% in July and marking their first drop in 27 months with a 2.3% drop in April. It was smaller than the median forecast of a 21.1% decline (forecasts ranged from 27.3% to 18.0% falls). The decrease was led by coal, crude oil and liquefied natural gas as the prices for energy remain far below year-earlier levels.
* Import volumes dipped 7.3% on year in August for the 10th straight decrease after sliding 4.3% in July.
* The trade balance came to a deficit of ¥930.5 billion in August after a revised ¥66.3 billion deficit in July and a ¥39.2 billion surplus in June, which was the first positive figure in 23 months. It was wider the consensus forecast of a ¥640.0 billion deficit (forecasts ranged from ¥856.5 billion to ¥100.0 billion deficits) but much smaller than a record high deficit of ¥3.51 trillion hit in January and a large ¥2.79 trillion deficit seen a year earlier.
* Exports to China, one of the top export destinations for Japanese goods, fell 11.0% on the year in August. It followed decreases of 13.4% in July, 10.9% in June, 3.4% in May, 2.9% in April, 7.7% in March, 10.9% in February, 17.1% in January and their first drop in seven months in December with a 6.2% drop. The decrease was led by lower demand for iron and steel, mineral fuels and electric measurement equipment. Shipments of semiconductors and other electronic parts rebounded. 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 slipped 8.8% in August for the eighth straight drop, following a revised 13.3% decrease in July and their first year-on-year drop in 23 months in January, down 4.0%. The decline was led by semiconductor-producing equipment, mineral fuels, and iron and steel.
* Exports to the U.S., which have exceeded those to China since October 2022, recorded their 23rd straight year-on-year rise, up 5.1% in August, following a 13.5% increase in July 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 continued to drop while those of auto parts slipped after recent gains.
* Shipments to the European Union posted the 30th straight year-on-year increase in August, up 12.7%, following a 12.4% rise in July. The increase reflects strong demand for automobiles, iron and steel as well as optical equipment including polarizing film used on liquid crystal displays and steppers for producing semiconductors.