August Trade Statistics

◆According to August 2016 trade statistics, export value declined in year-to-year terms for the eleventh consecutive month by -9.6%. This was likely due to the sharp decline in export volume to the US. Moreover, the continuing appreciation of the yen has caused the export price to continue its decline, contributing to downward pressure on export value. Meanwhile, import value also declined for the twentieth consecutive month at -17.3%. As a result, the trade balance fell into the red for the first time in three months at -18.7 bil yen.

◆Export value in seasonally adjusted terms declined for the second consecutive month at -0.0% m/m, while export volume declined as well for the second consecutive month by -0.5% (seasonal adjustment performed by DIR). Looking at export volume by source of demand, exports to the US suffered a major decline at -12.4%, while EU exports also declined for the second consecutive month at -1.8%. Meanwhile, exports to Asia were up just slightly for the first time in two months at +0.1%. As for export volume by product, automobile exports to the US, which had been maintaining a firm undertone until now, suffered a steep decline, while exports of iron & steel and non-ferrous metals to Asia also fell, contributing to the overall negative tone. On the other hand, exports of ICs to Asia continue to achieve growth, due most likely to sales of new model smart phones.

◆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. With the world economy overall showing the effects of monetary easing, demand for consumer goods is relatively favorable. However, with low operating rates and the continuing downturn in natural resource prices, we expect that it will take quite a bit more time for a significant and sustainable recovery in corporate demand affecting materials and capital goods to take hold.