| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Balance | ¥-863.00B | ¥-1,039.90B to ¥-404.40B | ¥-637.61B | ¥-115.85B | ¥-115.63B |
| Imports - Y/Y | -8.1% | -9.9% to -5.2% | -7.7% | -2.2% | |
| Exports - Y/Y | -4.2% | -5.0% to -1.4% | -1.7% | 2.0% |
Highlights
Key points from tariff-hit Japan trade data:
--Export values -1.7% y/y (volumes were up) in May, their first drop in eight months since -1.8% in September 2024 (the first slump in 10 sparked by China's sluggish consumption) vs. +2.0% in April, +4.0% in March amid the global trade war initiated by Washington; The decline was led by automobiles and iron/steel, hit by Trump tariffs, for mineral fuels in light of slower global demand.
--Import values -7.7% (volumes were up) vs. -2.2% in April, +1.8% in March, led by lower global prices for crude oil, coal and non-ferrous metals.
--A trade deficit of ¥637.61 billion, the second straight monthly shortall; widening from a revised ¥115.63 billion deficit in April but narrowing from a massive ¥1.23 trillion deficit in May 2024.
--Export values -1.7% y/y (volumes were up) in May, their first drop in eight months since -1.8% in September 2024 (the first slump in 10 sparked by China's sluggish consumption) vs. +2.0% in April, +4.0% in March amid the global trade war initiated by Washington; The decline was led by automobiles and iron/steel, hit by Trump tariffs, for mineral fuels in light of slower global demand.
--Import values -7.7% (volumes were up) vs. -2.2% in April, +1.8% in March, led by lower global prices for crude oil, coal and non-ferrous metals.
--A trade deficit of ¥637.61 billion, the second straight monthly shortall; widening from a revised ¥115.63 billion deficit in April but narrowing from a massive ¥1.23 trillion deficit in May 2024.
Market Consensus Before Announcement
Key forecast points: exports -4.2%, the first y/y drop in eight months led by autos, iron/steel, computer chips amid Trump tariffs; imports -8.1%, the first drop in two months due to falling crude oil and coal prices; a ¥863.00 billion trade deficit, the second straight shortfall.
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.
