December 2021 Trade Statistics

◆According to December 2021 trade statistics, export value grew for the tenth consecutive month at +17.5% y/y. Meanwhile, in seasonally adjusted terms, export value declined for the first time in three months at -0.2% m/m. Growth in export prices provided underlying support for export value, but the decline in export volume exceeded that amount. As for import value, major growth continued at +41.1% y/y. The trade balance (seasonally adjusted value) was in the red for the eighth consecutive month at -435.3 bil yen. Meanwhile, the trade balance for the Oct-Dec period of 2021 grew substantially at -1,327 bil yen in comparison to the -927.8 bil yen recorded during the Jul-Sep period. However, on a volume basis, both exports and imports exhibited similar growth rates, hence contribution of overseas demand to the real GDP growth rate during the Oct-Dec period is expected to be at around zero.

◆Export volume (seasonally adjusted by DIR) declined for the first time in three months at -2.2% m/m. Looking at export volume by source of demand, exports to the US maintained favorable performance at +2.2%, while the EU at -4.6% and Asia at -3.3% shifted into a decline, bringing overall performance down.

◆As for the future of exports, moderate growth is expected. Recovery export is expected to continue to progress in motor vehicles, a major component, centering on exports to the US. However, it is important to note that the worldwide spread of the Omicron variant of COVID-19 is likely to reduce consumption opportunities in many countries, posing a downside risk to exports from Japan.