July 20, 2017
Summary
◆According to June trade statistics, export value grew by +9.7% y/y, less than last month’s result of +14.9%. This was due to the fact that export volume in y/y terms grew less than in the previous month (+4.0% in June in comparison to +7.5% in May). Meanwhile, the Japan Customs rate in June was at 110.9 yen/dlr, representing yen depreciation of 2.2% in y/y terms.
◆Export value in seasonally adjusted terms declined slightly by -0.3% m/m, while export volume grew for the second consecutive month at +0.2% (seasonal adjustment by DIR). Looking at export volume by source of demand, exports to the US grew by +1.5%, while exports to Asia declined by -0.7%. Meanwhile, exports to the EU suffered a major decline at -4.4%. However, the downturn in exports to the EU is expected to be a temporary one, and there should be no change in the basic tone.
◆As for the future of exports, we see steady growth continuing for the overseas economy centering on exports to the EU. 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.
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