August Trade Statistics

◆According to August 2014 trade statistics, exports remained stagnant, leaving little room for optimism where improvement in the trade balance is concerned. Exports in monetary terms were down for the first time in two months at -1.3% y/y, though they did exceed market consensus (-2.6% y/y). Export price was up for the second consecutive month at +1.6% y/y, but export volume fell considerably below this figure at -2.9%. Meanwhile, the August import amount suffered a decline for the first time in three months at -1.5% y/y.

◆The trade balance was in the red for the 26^th consecutive month at -948.5 bil yen, though the extent of the deficit shrank slightly in comparison with the previous year (-971.4 bil yen). This was the second consecutive month in which the trade deficit shrank somewhat, due to the fact that the decline in imports exceeded that of exports.

◆With the increase in domestic demand, coupled with the expected continuation of growth in import volume and amount, the trade balance is not expected to be back in the black very soon – in fact the deficit is expected to continue for some time. It is still quite possible for the amount of the trade deficit to increase again in the future, with growth in the amount of energy imports due to the yen having weakened further during the latter half of August, and increased imports of communications equipment due to the new iPhone 6 going on sale.