August 2022 Trade Statistics

◆According to August 2022 trade statistics, export value grew for the eighteenth consecutive month at +22.1% y/y. Meanwhile, export value on a seasonally adjusted basis suffered a decline for the first time in eleven months at -0.7%. While exports of motor vehicles are recovering, the pause in growth of exports to Europe and the sluggish recovery in exports to China weighed heavily. Meanwhile, import value achieved major growth at +49.9% y/y. As a result, the trade balance was in the red at -2,817.3 bil yen, or -2,371.3 bil yen in seasonally adjusted terms, both figures representing the largest deficits in the history of these statistics.

◆Export volume in August (seasonally adjusted by DIR) suffered a decline for the first time in four months at -2.3% m/m. Manufacturing equipment such as semicon machinery etc., and integrated circuits, which had maintained a high level as of this point, experienced a pause in their performance. Looking at export volume by source of demand, exports to the EU were down by -15.5%, with Asia down by -6.6%, while export volume to the US shifted into growth at +13.3%.

◆Export volume is expected to move toward growth in the future. The normalization of China’s economy and mitigation of the shortage in semiconductors are positive factors, plus container freight rates are falling and there are signs that the turmoil in logistics is on the way to being brought under control. Going forward, the easing of supply constraints is likely to boost exports. On the other hand, the slowdown in the US and European economies, and China’s Zero Covid policy remain cause for concern.