December 2022 Trade Statistics

◆According to December 2022 trade statistics, while export value grew by +11.5% y/y, it suffered a decline on a seasonally adjusted basis at -3.5% m/m. The decline was due to sluggish export volume. Meanwhile, import value grew by +20.6% y/y. The growth rate has slowed sharply over the past two months due to the easing of the weak yen amongst other factors. As a result, the trade balance was in the red for the 17th consecutive month at -1,448.5 bil yen. The trade balance was in the red for the second consecutive year in 2022 at -19,971.3 bil yen, the largest trade deficit recorded since this statistic began.

◆Export volume in December (seasonally adjusted by DIR) declined for the second consecutive month at -5.0% m/m. Motor vehicle exports to the EU experienced a reactionary decline after having achieved a major recovery in the previous month, and exports of semiconductor related goods to Asia, such as semicon machinery etc. and ICs, also suffered a decline. Looking at export volume by source of demand, exports to the US were up by +0.7%, while exports to the EU declined by -3.2%, with Asia also declining by -6.3%.

◆Export volume is expected to mark time in the future, and then shift into growth as China’s economy gradually normalizes. The mitigation of supply constraints and China’s shifting into a “living with Corona” policy will provide positive factors. However, the effects of continued interest rate hikes in the US and Europe need to be watched.