Japan: Merchandise exports growth dips in August
Latest reading: Yen-denominated merchandise exports rose 5.6% in annual terms in August, down from July’s 10.2% rise. August’s result was the second-worst so far this year, and significantly undershot market expectations. However, the deceleration is likely to be in part a blip, reflecting temporary factors including the closure of Toyota factories due to a typhoon. Meanwhile, yen-denominated merchandise imports expanded 2.3%, slowing from July’s 16.6% rise.
Overall, the yen-denominated merchandise trade balance deteriorated from the previous month, recording a JPY 0.7 trillion deficit in August (July 2024: JPY 0.6 trillion deficit; August 2023: JPY 0.9 trillion deficit).
Panelist insight: Nomura’s Yuki Ito and Kyohei Morita said:
“On a Jul–Aug average basis, goods exports were up 0.3% versus the Apr–Jun average, while goods imports were up 2.3%. As of 9 September, we forecast real exports (goods and services) of +1.1% q-q and real imports of +2.1% q-q in Jul–Sep GDP statistics. While much will depend on what service imports and exports look like, data thus far shows that exports are running below our expectations, while imports are broadly in line. Our forecasts assume a 0.2ppt negative contribution from external demand in Jul–Sep, but we now see an increased likelihood that the actual figure will be greater.”