January 2017 Trade Statistics

◆According to January 2017 trade statistics, export value grew for the second consecutive month at +1.3% y/y, while falling below market consensus at +5.0%. January export volume was stagnant due to Lunar New Year celebrations in the Sinosphere. It will be necessary to take this into account when looking at export volume and consider this figure in terms of averages instead. The same will be true for looking at February figures as well once they are out.

◆Export value in seasonally adjusted terms grew for the sixth consecutive month at +0.7% m/m, while export volume suffered a decline for the second consecutive month at -0.9% (seasonal adjustment by DIR). Looking at export volume by source of demand, exports to the US declined for the second consecutive month at -1.9%, while exports to the EU also declined for the second consecutive month at -2.1%. Exports to Asia fell for the first time in four months at -3.1%. As for export volume by product, passenger vehicle exports to the US appear to be about to peak out, while exports of ICs and audio equipment made major gains in a rebound from the previous months decline. Exports to Asia maintained favorable performance with export volume in the areas of ICs, two-wheelers and auto parts doing well.

◆As for the future of exports, our opinion remains unchanged from the previous report. We see moderate growth, which will be maintained due to the underlying strength of overseas economies. However, we advise caution as regards recent developments occurring immediately after President Trump’s inauguration, such as the decision to withdraw from TPP and renegotiate NAFTA, possibly even withdrawing from that agreement. If the US economy becomes overly protectionist, it could cause world trade to stagnate, turning into a long-term risk factor.