January 2024 Trade Statistics

◆According to January 2024 trade statistics, export value grew for the second consecutive month by +11.9% y/y. The main factor was the shift of the Chinese New Year season into February, which brought an upswing in exports to China. On the other hand, export value declined on a seasonally adjusted basis for the first time in two months by -3.6% m/m. Export volume, which indicates the actual export situation, was soft, especially to the US and Europe. Meanwhile, import value was down for the tenth consecutive month by -9.6% y/y, and -10.5% m/m on a seasonally adjusted basis. As a result, the trade balance was in the red for the first time in two months at -1,758.3 bil yen, while on a seasonally adjusted basis it was in the black for the first time in 32 months at +235.3 bil yen.

◆Export volume in January 2024 declined for the first time in two months by -4.7% m/m. Exports of motor vehicle related goods to the US and China declined, and a broad range of export items to Europe suffered declines. Looking at export volume by source of demand, the decline was on the large side for exports to the US (-11.5%) and the EU (-6.6%). On the other hand, exports to Asia maintained a growth trend at +4.5%.

◆Export volume is expected to continue marking time for a while longer and then shift into a growth trend in the latter part of the year. In the short-term, recovery production of motor vehicles is losing some of its vitality, and exports overall will likely be sluggish due to the downturn in the US and European economies. On the other hand, improvement in the silicon cycle is expected to provide underlying support for a recovery in demand for semiconductor related goods. The Chinese New Year is expected to be a drag on performance in February, with export volume seen on the down side.