— Import Gain Remains High on Energy, Leading to 5th Straight Trade Deficit
By Max Sato
(MaceNews) – Japanese exports rose from a year earlier for the 10th straight month in December, thanks to reopening demand for iron and steel and electronic parts as well as easing supply constraints for the auto industry, data released Thursday by the Ministry of Finance showed.
Rising costs of oil and gas, compared to a year before, led to the fifth consecutive monthly trade deficit in December, but the negative balance narrowed from November.
For the whole of 2021, both exports and imports marked the first increase in three years, recovering from the pandemic-caused 2020 slump.
The key points from the MOF’s Trade Statistics:
* Exports rose 17.5% in December for the 10th straight year-on-year rise after returning to a double-digit percentage gain of 20.5% in November. The increase was larger than 9.4% in October and 13.0% in September but smaller than 26.2% in August, 37.0% in July and 48.6% in June. The latest figure came in firmer than the median economist forecast of a 16.0% rise. Export volumes and values have already recovered to pre-pandemic levels, limiting the scope for a sharply bigger rise from a year before.
* The increase was led by demand for automobiles, iron and steel and semiconductors among other electronic parts. Overall shipments of automobiles rose 17.5% on year in December after rebounding 4.1% in November and earlier drops including a 36.7% plunge in October. Auto exports to the US, the key market, also picked up 11.9% after slumping 11.5% in November and 46.4% in October.
* For the whole of 2021, Japanese exports rebounded 21.5% from the previous year after slumping 11.1% in 2020, falling 5.6% in 2019 and rising 4.1% in 2018.
* On a seasonally adjusted basis, exports dipped 0.2% in December from the previous month, the MOF said. The Bank of Japan’s real export index rebounded a seasonally adjusted 9.2% on month in November for the first rise in four months, led by a sharp gain in auto shipments, after falling 0.5% in October and 6.6% in September. The October-November average dipped 1.8% from the July-September quarter, when the index decreased 2.9% on quarter. The BOJ will release its real trade indexes for December at 1400 JST (0500 GMT/0000 EST) Thursday.
* Imports rose 41.1% on year in December, the 11th straight rise after gaining 43.8% in November, 26.8% in October and 38.3% in September. The pace of increase was slower than the median economist forecast of a 42.8% rise. Vaccine imports from Europe and the US continued to show year-on-year gains.
* In 2021, imports marked the first rise in three years, up 24.3%, after falling 13.5% in 2020 and 5.0% in 2019 and rising 9.7% in 2018.
* The trade balance came to a deficit of Y582.4 billion in December, marking the fifth straight month of a shortfall after a deficit of Y955.6 billion (revised from Y954.8 billion) the previous month and compared to a surplus of Y708.3 billion in December 2020. The gap was narrower than the consensus call of a Y784.1 billion deficit.
* For the whole of 2021, Japan’s trade balance came to a deficit of Y1.47 trillion, after chalking up a surplus of Y338.3 billion in 2020 and a deficit of Y1.67 trillion the previous year.
* Exports to China, the top export destination for Japan, rose 10.8% from a year earlier in December for the 18th consecutive gain after rising 16.0% in November, 9.6% in October and 10.3% in September. The increase was led by strong demand for electronic parts, automobiles and organic compounds (cosmetics, etc.) despite slowing growth in the world’s second-largest economy.
* Japanese exports to Asia as whole marked the 10th straight y/y rise, up 16.6%, after climbing from 24.7% in November, 15.0% in October and 21.3% in September. The pace has slowed from increases of 26.1% in August, 32.5% in July and 37.1% in June.
* Exports to the U.S., another key market, recorded the third straight year-on-year rise, up 22.1% in December, after rising 10.0% in November, 0.3% in October and falling 3.3% in September (the first drop in seven months) and rising 22.8% in August. The increase was led by automobiles, chip-making equipment and iron and steel.
* Shipments to the European Union posted the 10th straight year-on-year increase, up 9.7% on year after gaining 16.4% in November and 12.1% in the previous two months, backed by strong demand for automobiles, construction and mining machines as well as iron and steel. Auto parts exports continued declining.