| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Balance | ¥-640.0B | ¥-856.5B to ¥-100.0B | ¥-930.5B | ¥-78.7B | ¥-66.3B |
| Imports - Y/Y | -21.1% | -27.3% to -18.0% | -17.8% | -13.5% | -13.6% |
| Exports - Y/Y | -2.3% | -5.5% to 2.6% | -0.8% | -0.3% |
Highlights
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 US 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.
Econoday's Relative Performance Index remained at minus 44, far below zero, which indicates the Japanese economy is performing much worse than expected. Excluding the impact of inflation, the RPI was at minus 50.
Export values dipped 0.8 percent on the year in August after edging down 0.3 percent in July for the first drop in 29 months and rising 1.5 percent 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 percent drop (forecasts ranged from a 5.5 percent fall to a 2.6 percent rise).
Amid slow global economic growth, export volumes fell 5.3 percent on the year for the 11th straight drop after falling 3.2 percent 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 percent on the year in August after falling a revised 13.6 percent in July and marking their first drop in 27 months with a 2.3 percent drop in April. It was smaller than the median forecast of a 21.1 percent decline (forecasts ranged from 27.3 percent to 18.0 percent 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 percent on year in August for the 10th straight decrease after sliding 4.3 percent 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 percent on the year in August. It followed decreases of 13.4 percent in July, 10.9 percent in June, 3.4 percent in May, 2.9 percent in April, 7.7 percent in March, 10.9 percent in February, 17.1 percent in January and their first drop in seven months in December with a 6.2 percent 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 percent to a record high ¥1.78 trillion in July 2022.
Japanese exports to Asia as a whole slipped 8.8 percent in August for the eighth straight drop, following a revised 13.3 percent decrease in July and their first year-on-year drop in 23 months in January, down 4.0 percent. The decline was led by semiconductor-producing equipment, mineral fuels, and iron and steel.
Exports to the US, which have exceeded those to China since October 2022, recorded their 23rd straight year-on-year rise, up 5.1 percent in August, following a 13.5 percent increase in July and a 36.5 percent 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 percent, following a 12.4 percent 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.
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.
Econoday's Relative Performance Index remained at minus 44, far below zero, which indicates the Japanese economy is performing much worse than expected. Excluding the impact of inflation, the RPI was at minus 50.
Export values dipped 0.8 percent on the year in August after edging down 0.3 percent in July for the first drop in 29 months and rising 1.5 percent 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 percent drop (forecasts ranged from a 5.5 percent fall to a 2.6 percent rise).
Amid slow global economic growth, export volumes fell 5.3 percent on the year for the 11th straight drop after falling 3.2 percent 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 percent on the year in August after falling a revised 13.6 percent in July and marking their first drop in 27 months with a 2.3 percent drop in April. It was smaller than the median forecast of a 21.1 percent decline (forecasts ranged from 27.3 percent to 18.0 percent 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 percent on year in August for the 10th straight decrease after sliding 4.3 percent 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 percent on the year in August. It followed decreases of 13.4 percent in July, 10.9 percent in June, 3.4 percent in May, 2.9 percent in April, 7.7 percent in March, 10.9 percent in February, 17.1 percent in January and their first drop in seven months in December with a 6.2 percent 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 percent to a record high ¥1.78 trillion in July 2022.
Japanese exports to Asia as a whole slipped 8.8 percent in August for the eighth straight drop, following a revised 13.3 percent decrease in July and their first year-on-year drop in 23 months in January, down 4.0 percent. The decline was led by semiconductor-producing equipment, mineral fuels, and iron and steel.
Exports to the US, which have exceeded those to China since October 2022, recorded their 23rd straight year-on-year rise, up 5.1 percent in August, following a 13.5 percent increase in July and a 36.5 percent 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 percent, following a 12.4 percent 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.
Market Consensus Before Announcement
Japanese export values are forecast to show a further drop, by 2.3 percent, in August after posting their first year-over-year decline in 29 months in July with a slight 0.3 percent dip, amid slowing global growth, although automobile shipments have been picking up on improved supply chains. Import values are seen falling on the year for the fifth straight month, down 21.1 percent, as energy and commodities prices have generally eased compared to last year's spike.
Japan is expected to record a second straight month of a trade deficit, worth ¥640.0 billion in August, after a revised ¥66.3 billion deficit in July and a ¥43.1 billion surplus in June, which was the first positive figure in 23 months. Due to lower import costs, the expected shortfall is seen much narrower than the ¥2.79 trillion deficit a year earlier.
Japan is expected to record a second straight month of a trade deficit, worth ¥640.0 billion in August, after a revised ¥66.3 billion deficit in July and a ¥43.1 billion surplus in June, which was the first positive figure in 23 months. Due to lower import costs, the expected shortfall is seen much narrower than the ¥2.79 trillion deficit a year earlier.
Definition
Merchandise Trade balance measures the difference between imports and exports of both tangible goods and services. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade.
Description
Japan's merchandise trade balance measures visible trade and excludes services. Specifically it is the difference between imports of goods and exports of goods. A positive value indicates a trade surplus (exports exceed imports) while a negative value indicates a trade deficit (imports exceed exports). Movements in the trade balance reflect altered demand for Japanese exports which subsequently impact the yen's value and directly affect GDP growth because of the economy's dependence on trade.
The report gives insight into changing trends regarding Japanese trade. Such developments are especially important for Japan, which is an export-oriented economy that has historically experienced large trade surpluses and any change can have a dramatic effect on the domestic economy. Typically the headline number is the change from the previous year in yen along with the percentage change in exports and in imports from the previous year.
The report gives insight into changing trends regarding Japanese trade. Such developments are especially important for Japan, which is an export-oriented economy that has historically experienced large trade surpluses and any change can have a dramatic effect on the domestic economy. Typically the headline number is the change from the previous year in yen along with the percentage change in exports and in imports from the previous year.
