December 2012 Trade Statistics

Exports signaling a bottoming

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January 24, 2013

  • Masahiko Hashimoto

Summary

◆In the December 2012 Trade Statistics (Ministry of Finance), export value declined 5.8% y/y, a wider slide than consensus expectations (down 4.2%). On a seasonally adjusted basis, however, export value increased 2.4% m/m, the second consecutive monthly gain, indicating that the underlying trend began to signal an end to persistent declines.


◆Import value increased 1.9% y/y, the second consecutive monthly gain—import volume remained flat y/y, import prices increased 1.8%, the second monthly gain in a row. As a result, the trade balance posted a deficit of Y641.5 billion, a negative figure for the sixth consecutive month. On a seasonally adjusted basis, it posted a deficit of Y800.7 billion, a negative figure for the 22nd month in a row.


◆In our provisionary estimate based on the December Trade Statistics, real exports and imports will likely decline q/q in Oct-Dec 2012 and foreign demand should post a negative contribution of 0.2-percentage points to GDP growth.


◆We anticipate exports bottoming in Oct-Dec 2012 and turning around thereafter. Exports to the EU will likely remain sluggish for the time being, dragged down by ongoing economic stagnation there. In contrast, those to the US and Asian trading partners will likely increase, driving overall exports, supported by an ongoing moderate economic recovery in the case of the former and a bottoming of economies in the case of the latter.

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