November 2022 Trade Statistics

◆According to November 2022 trade statistics, export value grew for the twenty-first consecutive month at +20.0% y/y, while export volume (seasonally adjusted by DIR) declined for the first time in three months. Import value grew by +30.3%, but this represents a sharp slowdown in growth rate in comparison to the previous month. As a result, terms of trade improved slightly, and the trade was in the red for the 16th consecutive month at -2,027.4 bil yen. On the other hand, the trade deficit was -1,732.3 bil yen in seasonally adjusted terms, which peaked in August.

◆Export volume in November (seasonally adjusted by DIR) declined for the first time in three months at -1.6% m/m. Motor vehicle exports, a major export item, are recovering, but are being held back by the downturn in semiconductor related goods and the decline in exports of capital goods and intermediate goods due to the shrinking of overseas demand. On the other hand, the recovery in exports of motor vehicles has been progressing further, centering on Europe. Looking at export volume by source of demand, exports to the US were down by -5.3%, while Asia also declined by -4.8%, and the EU shifted into growth at +2.8%.

◆Export volume is expected to mark time, then shift into a growth trend due to progress in economic normalization in China. The mitigation of supply constraints and the easing up of China’s zero-Covid policy will provide positive factors, but continued interest rate hikes in the US and Europe are expected to be a drag on exports.