— Imports Surge on Rising Energy Costs, Leading to 4th Straight Trade Deficit
By Max Sato
(MaceNews) – The pace of year-on-year increase in Japanese exports picked up in November after slowing in October amid a recent improvement in parts supply from Southeast Asia but global transport bottlenecks and the spread of the Omicron coronavirus variant clouded growth prospects, data released Thursday by the Ministry of Finance showed.
Rising costs of oil and gas led to the fourth consecutive monthly trade deficit in November, with the negative gap widening sharply from October.
The key points from the MOF’s Trade Statistics:
- Exports rose 20.5% in November for the ninth straight year-on-year rise, with the pace of increase picking up from 9.4% in October and 13.0% in September, but it was slower than 26.2% in August, 37.0% in July and 48.6% in June. The latest figure came in softer than the median economist forecast of a 21.2% rise. Export volumes and values have recovered to pre-pandemic levels, limiting the scope for a further large increase.
- The increase was led by solid reopening demand for iron and steel, chip-making equipment as well as semiconductors and other electronic parts. Overall shipments of automobiles rebounded 4.1% on year in November after recent drops including a 36.7% plunge in October. Auto exports to the U.S. remained weak, down 11.5%, although the drag from supply chain disruptions appeared to have eased as the pace of decline shrank from October’s 46.4% slump.
- On a seasonally adjust basis, exports rose 5.3% in November from the previous month, the MOF said. The Bank of Japan’s real export index dipped a seasonally adjusted 0.1% on month in October for the third straight drop after slumping 6.6% in September, and fell 5.8% from the July-September quarter, when the index decreased 2.9% on quarter. The BOJ will release its real trade indexes for November at 1400 JST (0500 GMT/0000 EST) Thursday.
- Imports soared 43.8% on year in November, the 10th straight rise after gaining 26.7% in October, 38.2% in September and 44.5% in August. The pace of increase was faster than the median economist forecast of a 40.0% rise. Vaccine imports from Europe and the US continued to show year-on-year gains.
- The trade balance came to a deficit of Y954.8 billion in November, marking the fourth straight month of a shortfall after a deficit of Y68.5 billion (revised from Y67.4 billion) the previous month and compared to a surplus of Y325.9 billion in November 2020. The gap was much wider than the consensus call of a Y675.0 billion deficit.
- Exports to China, the top export destination for Japan, rose 16.0% from a year earlier in November for the 17th consecutive gain, with the pace of increase accelerating from 9.5% in October, 10.3% in September and 12.6% in August, but was slower than 18.9% in July and 27.7% in June. The increase continued to be led by strong demand for chip-making machines, semiconductors and irons and steel.
- Japanese exports to Asia as whole marked the eighth straight y/y rise, up 24.7%, with the pace of growth picking up from 15.0% in October and 21.3% in September but slowing from 26.1% in August, 32.5% in July and 37.1% in June.
- Exports to the U.S., another key market, recorded second straight year-on-year rise, up 10.0% in November, after edging up 0.3% in October, falling 3.3% in September (the first drop in seven months) and rising 22.8% in August. The increase was led by construction and mining machinery, chip-making equipment and electrical measuring equipment, largely in line with the pattern seen in October.
- * Shipments to the European Union posted the ninth straight year-on-year increase, up 16.4% on year after gaining 12.1% in the previous two months, backed by solid demand for automobiles and optical equipment, which includes fiber scopes and steppers (motors for electronic devices) as well as iron and steel. Auto parts exports declined.
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Contact this reporter: max@macenews.com.
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