Japan: Merchandise exports rise for fourth successive month in December
Latest reading: In December, the trade balance was JPY +0.1 trillion, down from the prior month’s JPY +0.3 trillion and less wide than economists had expected. Over the last 12 months, the trade balance summed to JPY -2.7 trillion.
Yen-denominated exports were up 5.1% in year-on-year terms in December, coming on the back of a 6.1% rise in the prior month. December’s rise was below economists’ expectations but was the fourth consecutive increase after four months of shrinkage. Shipments to the U.S. plunged over 10%, resuming the similarly large declines seen in May–September, as pre-tariff frontloading lost steam.
Yen-denominated imports were up 5.3% yoy in December, coming on the back of a 1.3% increase in the previous month.
Outlook: Our panel of economists expects exports of goods and services to contract again in Q4 in sequential terms, albeit at a softer pace than in Q3; U.S. tariffs will continue to weigh on outbound shipments, notwithstanding the recent trade agreement.
Panelist insight: Nomura’s Yuki Ito and Kyohei Morita said:
“In Oct–Dec, real goods exports were up 0.1% q-q and real goods imports were down 0.4% (adjustments for inflation and seasonal variation by Nomura). Also taking into account service imports and exports, we think it now looks more likely that external demand (exports minus imports) made a positive contribution to real GDP in Oct–Dec.”