Japan: Merchandise exports unexpectedly decline in September
Latest reading: Yen-denominated merchandise exports fell 1.7% in annual terms in September, down from August’s 5.5% rise and marking the worst result since February 2021. Meanwhile, yen-denominated merchandise imports expanded 2.1%, slowing from August’s 2.3% rise.
Overall, the yen-denominated merchandise trade balance improved from the previous month, recording a JPY 0.3 trillion deficit in September, compared to a JPY 0.7 trillion deficit in August.
Outlook: September’s figure for exports undershot market expectations of a slight rise and marked the first year-on-year decline in merchandise exports in 10 months. However, adjusting for seasonality and inflation, merchandise exports surged 7.9% month on month, according to estimates by Nomura. This suggests that external demand continued to recover in Q3 on an upturn in the global electronics cycle; our Consensus Forecast is for quarter-on-quarter growth in exports of goods and services to have risen to a three-quarter high in Q3.
Panelist insight: Nomura’s Yuki Ito and Kyohei Morita said:
“We forecast real exports (total of goods and services) in the GDP statistics up 1.1% q-q and real imports up 2.1%. Judging by the data for both goods and services, actual imports and exports were lower than we forecast. However, based on the difference between the two (net exports = exports – imports), we think it looks increasingly likely that the contribution to real GDP from external demand was slightly higher than we have forecast (-0.2ppt).”