September 2023 Trade Statistics
Trade deficit on a seasonally adjusted basis continues to contract, backed by robust exports
October 19, 2023
Summary
◆According to September 2023 trade statistics, export value grew for the first time in three months by +4.3% y/y. This was due mainly to the effects of recovery production of motor vehicles and a narrowing of the range of decline in exports of semicon machinery etc. On a seasonally adjusted basis, export value grew for the first time in two months by +7.2% m/m. Meanwhile, import value was down for the sixth consecutive month by -16.3% y/y. On a seasonally adjusted basis, it grew for the first time in two months by +5.4% m/m. As a result, the trade balance was back in the black for the first time in three months at +62.4 bil yen. The trade deficit on a seasonally adjusted basis continues to contract at -434.1 bil yen.
◆Export volume in September grew for the first time in two months by +6.2% m/m in a rebound from the steep decline suffered in August. Export volume is growing moderately despite fluctuations. Performance was buoyed by exports of semiconductor related goods to the US and Asia, as well as exports of motor vehicle related goods to the US and Europe. On the other hand, motor vehicles, for which recovery exports had been progressing, marked time in comparison to the previous month. Looking at export volume by source of demand, all regions achieved growth, with exports to the US up by +5.1%, exports to the EU up by +6.7%, and exports to Asia up by +9.8%.
◆Export volume is expected to continue in a moderate growth tone. Exports will likely be driven by motor vehicles as recovery production continues, while in addition, underlying strength in the US economy will encourage exports of a wide range of goods. However, according to the results of the BOJ Tankan Survey, pent-up demand for motor vehicles in the overseas market will likely peter out sometime during FY2023. In addition, in the US and Europe, corporate capital investment is likely to be on the downside under the tight financial environment, therefore exports of capital goods to the region are expected to remain sluggish for the time being.
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