Japan: Merchandise exports remain soft in October
Latest reading: Yen-denominated merchandise exports rose 3.1% in annual terms in October, contrasting September’s 1.7% drop and beating market expectations. That said, the print was still the second-worst in 11 months.
Meanwhile, yen-denominated merchandise imports rose 0.8%, decelerating from September’s 2.1% rise.
Overall, the yen-denominated merchandise trade balance improved from the previous month, recording a JPY 0.5 trillion deficit in October, compared to a JPY 0.3 trillion deficit in September.
Outlook: Our panelists expect exports of goods and services to increase at a sharp pace in the fourth quarter in sequential terms, while imports of goods and services are projected to stagnate. This suggests that net trade will boost GDP in the period. In 2025, exports growth is forecast to roughly quadruple from 2024. That said, larger-and-quicker-than-expected tariffs under the upcoming Trump administration pose a downside risk.
Panelist insight: Nomura’s Yuki Ito and Kyohei Morita said:
“After making adjustments for inflation and seasonality, we estimate that real goods exports were down 4.8% m-m in October 2024 and that real goods imports were down by 2.5% […]. We forecast real exports (total of goods and services) in the Oct–Dec GDP statistics up 0.6% q-q and real imports down 1.5%, with external demand (net exports), as calculated by subtracting imports from exports, making a positive contribution to real GDP (we forecast a +0.4ppt q-q contribution to real GDP in Oct–Dec; as of 15 November). Goods imports and exports in October, the first month of the Oct–Dec quarter, were broadly consistent with our outlook.”