November 2023 Trade Statistics

◆According to November 2023 trade statistics, export value declined for the first time in three months by -0.2% y/y. On a seasonally adjusted basis, export value fell for the second consecutive month by -1.8% m/m. The volume index, which represents the actual status of exports, was weak, mainly due to a decrease in motor vehicle exports caused by the shutdown of some factories of Toyota Motor Corporation. Meanwhile, import value was down for the eighth consecutive month by -11.9%. However, the extent of decline is narrowing, partly due to the surge in crude oil prices caused by heightened geopolitical risks. On a seasonally adjusted basis, imports were down by -2.7% m/m. As a result, the trade balance posted a deficit of -776.9 bil yen. The deficit was at -408.9 bil yen on a seasonally adjusted basis, suggesting that the pace of the narrowing deficit is slowing down.

◆Export volume in November declined for the second consecutive month by -5.6% m/m. Exports of motor vehicles to a broad range of regions declined. Looking at export volume by source of demand, performance was down overall, with exports to the US down by -8.9%, the EU down by -8.9%, and exports to Asia down by -4.9%.

◆Export volume is expected to mark time in the future on average. Recovery production of motor vehicles is experiencing a pause, while in addition, exports overall are becoming sluggish due to the downturn in the global economy. We expect the slowdown in personal consumption in the US and the decline in the European economy will offset the impact of China's economic recovery, and that external demand from Japan’s perspective will be sluggish.