September Trade Statistics

◆In the September 2013 Trade Statistics (Ministry of Finance), export value posted a y/y advance for the seventh month in a row (up 11.5%) but short of consensus expectations (up 15.5%). Breaking down export value, export price remains on a strong uptrend (up 13.6%), benefitting from ongoing weak-yen effects and pushing up export value, while export volume fell short of the year-earlier level for the first time in three months (down 1.9%). On a seasonally adjusted m/m basis, export value posted the first slide in two months (down 0.3%), while it posted the tenth consecutive gain on a three-month moving average basis. This suggests that the underlying uptrend continues but has begun to slacken due to stagnant growth in export volume.

◆The Export Volume Index (seasonally adjusted by DIR) posted the first m/m slide in two months (down 1.2%). By trading partner, exports to the EU increased, but those to Asian trading partners and the US declined, pushing down the headline index. Underlying export volume to the EU has firmed up reflecting the bottoming out of the EU economy, while exports to Asian trading partners and the US have stagnated. As a whole, export volume has leveled off.

◆Based on the September figures, we calculated the impact of trade on GDP figures. While imports are likely to increase q/q in Jul-Sep 2013, exports are to remain flat, resulting in foreign demand (net exports) seeing the first negative contribution to q/q GDP in three quarters. We estimate the contribution to be minus 0.5-percentage points.