November Trade Statistics

◆In the November Trade Statistics (Ministry of Finance), export value declined 4.1% y/y, a narrower slide than consensus expectations (down 5.5%). Export value slipped 0.1% m/m, the second consecutive monthly drop on a seasonally adjusted basis. Thus, the underlying deterioration continues.

◆Import value increased 0.8% y/y, the first gain in two months—import volume declined 0.9%, the second monthly negative growth in a row, but import prices increased 1.8%, the first gain in six months. As a result, the trade balance posted a deficit of Y953.4 billion, a negative figure for the fifth consecutive month. On a seasonally adjusted basis, it posted a deficit of Y868.5 billion, a negative figure for the 21^st month in a row.

◆Although the worsening of exports continues, as our main scenario, we expect a gradual recovery from 2013 onward. Exports to the EU will likely remain sluggish for the time being, dragged down by ongoing economic stagnation there. In contrast, exports to the US are unlikely to deepen the bottom and should remain firm, supported by the ongoing moderate US economic recovery. Meanwhile, exports to Asian trading partners should recover gradually, accompanied by a bottoming of economies, centering on China.