November Trade Statistics

◆According to November trade statistics, export value grew by +16.2% y/y, while market consensus was at +14.7%, thereby expanding the extent of growth in comparison to the previous month (+14.0%). Growth in export volume to the US and Asia provided backing for these results. The Japan Customs rate in November was 113.54 yen/dlr, representing yen depreciation of 8.2% in y/y terms.

◆Looking at the seasonally adjusted values, we see export volume up for the second consecutive month by +3.4% m/m. Looking at export volume by source of demand, the US was up by +3.4% as a result of growth in exports of automobiles and automobile parts, while exports to Asia grew by +2.7% due to an increase in exports of ICs and iron & steel. On the other hand, the negative factor was exports to the EU where were down by -3.4% due to a major decline in exports of automobiles, and computer parts.

◆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 the current trend in monetary policies in the US and Europe. In the US, the Fed is continuing its tight money policy, and the ECB has announced that it will begin reducing its asset purchases (tapering) beginning next year. There is risk that tight money policy on the part of central banks in both the US and Europe could bring downward pressure on those economies.