October 2022 Trade Statistics

◆According to October 2022 trade statistics, export value grew for the twentieth consecutive month at +25.3% y/y. However, export volume (seasonally adjusted by DIR), which indicates the actual situation of exports, achieved only moderate growth from the previous month due to the decline of exports to China, and a pause in the rapid recovery in exports of motor vehicles. Meanwhile, import value achieved a sharp increase in growth rate in comparison to the previous month at +53.5% y/y. As a result, the trade deficit remained large at -2,162.3 bil yen (or -2,299.2 bil yen in seasonally adjusted terms).

◆Export volume in October (seasonally adjusted by DIR) grew a small amount for the second consecutive month at +0.5% m/m. Motor vehicle exports, which had been registering rapid growth up to this point, paused briefly. Looking at export volume by source of demand, exports to the US were up by +0.1%, while the EU suffered a decline of -0.7% and Asia declined by -2.5%. Exports to Asia were influenced by the sharp decline in exports to China, which fell by -10.1%.

◆Export volume is expected to move toward extremely moderate growth in the future. The mitigation of supply constraints and progress in the normalization of China’s economy, and the weak yen, will likely be positive factors. On the other hand, the external environment is worsening centering on the US and Europe. A shift into a declining trend in exports to Europe is likely in the future with this area headed for recession.