March Trade Statistics

◆According to March 2014 trade statistics, export volume recorded its 13th consecutive monthly gain in monetary terms at +1.8% y/y, but fell below market consensus (+6.5%). Results showed exports maintaining a low tone. Export price was up 4.4% y/y, continuing growth, but export volume declined for the first time in 2 months recording -2.5% y/y, becoming a factor in pushing down exports overall. In seasonally adjusted terms export amount fell for the first time in 2 months, registering -2.7% in month-to-month terms.

◆Export volume index on a seasonally adjusted basis (DIR) declined for the first time in 2 months registering -2.0% m/m. By region, exports to the EU fell -2.9% while exports to Asia were down -4.9% m/m helping to push the overall figures down. In contrast, US figures were up by +2.4% m/m, registering growth for the first time in 2 months.

◆In the future, the strengthening trend in exports should gradually become apparent. During the last month production lines at factories in Japan were focusing on domestic shipments in preparation for last minute demand associated with the impending increase in the consumption tax. For this reason, domestic shipments have experienced a reaction decline since April, but gradually the percentage of shipments of export goods should recover.

◆The March import amount made y/y gains for the 17th consecutive month at +18.1% y/y. Meanwhile, the import price grew by 5.8% in y/y terms in a continuation of the recent trend, though slowing somewhat. The major increase in import amount in March is due mainly to the increase in import volume, growing a walloping +11.6% in year-to-year terms. As a result, Japan continued to register a trade deficit for the 21^st month in a row at 1,446 billion yen. The trade deficit for FY2013 was at a historic high of 13.75 trillion yen.