July Trade Statistics

◆According to July 2016 trade statistics, export value fell in year-to-year terms for the tenth consecutive month by -14.0%. The yen continues to appreciate on the foreign exchange market, bringing a major decline in export price. Meanwhile, import value also declined for the nineteenth consecutive month at -24.7%. As a result, the trade balance was in the black for the second consecutive month at +513.5 bil yen.

◆Export value in seasonally adjusted terms declined for the first time in two months by -1.8% m/m, while export volume declined as well for the first time in two months, also by -1.8% (seasonal adjustment performed by DIR). Looking at export volume by source of demand, exports to the US grew considerably by +4.2%, while EU exports declined for the first time in two months by -0.6%. Meanwhile, exports to Asia declined for the second consecutive month by -0.2%. While export volume shifted into a declining trend in July, some products showed signs of hitting bottom, hence results were not necessarily that negative.

◆As for the future of exports, there is a very good possibility that performance will continue to mark time, with some ups and downs along the way, as overseas economies continue moderate growth. However, we expect that it will take quite a bit more time for a significant and sustainable recovery in overseas demand to take hold. There is a good possibility that exports of capital goods and materials to both the US and Asia will continue to be unfavorable due to the low level of US corporate earnings, and the continuing necessity of adjustments which Asian economies still need to carry out in regard to overcapacity.