August Trade Statistics

◆According to August 2015 trade statistics, export value grew for the twelfth consecutive month at +3.1% y/y. However, growth has slowed considerably in comparison to the previous month’s +7.6%, as well as falling below market consensus (+4.3%). Meanwhile, import value declined by -3.1% y/y, its eighth consecutive month of decline, and the trade balance was in the red for the fifth consecutive month at -569.7 bil yen.

◆This month’s results confirm that overseas demand continues to be stagnant. However, momentum has left behind its worst period, though performance is expected to remain weak for the time being. The US carries the weight of sagging crude oil prices and a strong dollar. It should therefore be noted that capital goods, a major export item to the US, may continue to perform unfavorably.

◆However, exports are expected to move toward a moderate recovery despite ups and downs. The US household sector continues to maintain a steady undertone, and exports centering on durables are expected to recover and enter a growth phase. As for the EU economy, the collapse in the price of crude oil and the effects of quantitative easing initiated by the ECB are encouraging a comeback. Recovery and expansion should continue in the future. Meanwhile in Asia, China’s real economy is beginning to show signs of pulling out of the doldrums due to the lowering of its reserve deposit rate and interest rate, and there is a good chance that further declines in demand can be avoided.