September Trade Statistics

◆According to September 2016 trade statistics, export value declined for the twelfth consecutive month by -6.9% y/y, but the extent of the decline was less than in the previous month. Export volume to the US, which suffered a sharp decline during the previous month, shifted into positive numbers, resulting in an upward swing for export value in September. Meanwhile, import value also declined for the twenty-first consecutive month at -16.3%. As a result, the trade balance was back in the black for the first time in two months at +498.3 bil yen. Based on the results of the September trade statistics, we estimate the contribution of overseas demand on a GDP basis for the Jul-Sep period to record a major upswing, due to mainly to the decline in imports.

◆Export value in seasonally adjusted terms grew for the second consecutive month at +0.3% m/m, while export volume grew as well for the first time in three months by +1.8% (seasonal adjustment performed by DIR). Looking at export volume by source of demand, exports to the US rebounded after the previous month’s major decline to register growth of +9.9%. Meanwhile, EU exports also grew for the first time in three months by +1.6%, with exports to Asia suffering a decline for the first time in two months at -1.6%. As for export volume by product, auto exports to the US rebounded after having suffered a major decline during the previous month. Meanwhile, exports of auto parts to the US, Europe, and Asia also grew, thereby contributing to upward pressure on export volume.

◆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.