June Trade Statistics

◆In the June 2013 Trade Statistics (Ministry of Finance), export value increased 7.4% y/y but undershot consensus expectations (up 10.0%). However, it posted a y/y advance for the fourth month in a row and posted a m/m gain for the seventh month in a row (up 1.1%; seasonally adjusted) confirming the ongoing uptrend continues.

◆The Export Volume Index (seasonally adjusted by DIR) posted the second m/m slide in a row (down 0.9%), indicating that the export volume is treading water. Shipments to the US and Asian trading partners increased from the previous month but those to Europe declined, dragging down overall export volume. However, overall export volume advanced for the fourth consecutive month on a three-month moving average basis, confirming the firming up continues in volume terms.

◆We anticipate export value continuing to increase, as export volume growth should intensify. By trading partner, export volume to the EU is likely to remain sluggish for the time being, while that to the US and Asian trading partners is likely to drive overall export volume, supported by the ongoing moderate economic recovery there. While Chinese and other emerging economies are signaling a slowdown and warrant a close watch, the shift to a weaker yen in end-2012 is likely to continue to push up export volume.