May Trade Statistics

◆According to May trade statistics, export value grew for the sixth consecutive month at +14.9% y/y, while at the same time falling below market consensus at +16.0%. Export volume in y/y terms grew more than in the previous month (+7.5% in May as compared to +4.1% in April), while export price also grew more than in the previous month (+6.9% in May as compared to +3.2% in April). Meanwhile, the Japan Customs rate in May was at 111.47 yen/dlr, representing yen depreciation of 2.3% in y/y terms.

◆Export value in seasonally adjusted terms marked time at -0.0% m/m, while export volume grew for the first time in three months at +1.0% (seasonal adjustment by DIR). Looking at export volume by source of demand, exports to the EU were up for the second consecutive month at +2.9% m/m, while exports to the US were down for the first time in two months at -2.0% along with those to Asia, which declined for the third consecutive month at -1.3%. Exports to the US were up and down, while those to the EU maintained favorable results. Exports to Asia have recently been weak.

◆As for the future of exports, we see steady growth continuing for the overseas economy with a focus on exports to the EU. Growth is expected to be extremely moderate. However, we advise caution as regards downside risk in the area of overseas demand. In the US, the Fed is expected to implement further interest rate hikes, as well as asset reduction, and this is expected to trigger a downturn in the US economy, while encouraging capital outflows from the emerging nations.