April Trade Statistics

Short of expectations but steady overall; export volume firming up

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  • Masahiko Hashimoto

Summary

◆In the April 2013 Trade Statistics (Ministry of Finance), export value increased 3.8% y/y but undershot consensus expectations (up 5.4%). However, it advanced y/y for the second consecutive month and was flat m/m on a seasonally adjusted basis, meaning the ongoing uptrend continues, which does not warrant an overly pessimistic view.


◆Export Volume Index (seasonally adjusted by DIR) posted the second consecutive m/m gain (up 1.9%), confirming a firming up in volume terms. While shipments to Asian trading partners declined for the first time in two months, those to the US and EU continued to increase, of which a surge in those to the US pushed up overall export volume.


◆We anticipate export value continuing to increase, as export volume will begin to rise from firming up. The forex factor will support export volume as positive effects of the shift to a weaker yen since end-2012 will emerge in full swing going forward—empirically, the shift to a weaker yen will lead to a gain in export volume with around a six-month lag. By trading partner, export volume to the EU is likely to remain sluggish for the time being, dragged down by the ongoing recession there. In contrast, that to the US and Asian trading partners is likely to drive overall export volume, supported by the ongoing moderate economic recovery there. However, overseas economies are signaling a slowdown and warrant a close watch.

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