October Trade Statistics

◆According to October trade statistics, export value grew by +14.0% y/y, while falling below market consensus at +15.7%. The extent to which export value grew shrank just slightly in comparison to the previous month’s result of +14.1%. Growth in export volume to Asia was behind positive performance. The Japan Customs rate in October was 112.40 yen/dlr, representing yen depreciation of 9.8% in y/y terms.

◆Looking at the seasonally adjusted values, we see export value up at +2.0% m/m, with export volume growing for the first time in two months at +0.7% (seasonal adjustment by DIR). Looking at export volume by source of demand, exports to the US were down by -2.2% m/m due to declines suffered in exports of both semiconductor manufacturing equipment and automobiles. On the other hand, exports to the EU (+4.1% m/m) helped push up overall results, with Asia also positive at +3.9%.

◆As for the future of exports, we see underlying strength continuing for the overseas economy bringing moderate growth in Japan’s exports. However, we advise caution as regards downside risk in the area of overseas demand. In the US, the Fed is continuing its tight money policy. This could bring downward pressure on the US economy, while at the same time encouraging capital outflows from the emerging nations.