April 2024 Trade Statistics

◆According to April 2024 trade statistics, export value grew for the fifth consecutive month by +8.3% y/y, while at the same time falling below market consensus (+11.0% according to Bloomberg survey). One reason is considered to be the sluggish recovery for motor vehicle exports. On a seasonally adjusted basis export value overall grew for the second consecutive month at +0.9% m/m. Meanwhile, import value grew for the first time in two months by +8.3%, y/y. The situation in the Middle East grows more tense, and the yen has weakened further, bringing a rise in import value for some energy components. On a seasonally adjusted basis import value overall declined for the first time in three months at -0.5% m/m. As a result, the trade balance was in the red for the first time in two months at -462.5 bil yen, while on a seasonally adjusted basis it was in the red for the 35th consecutive month at -560.8 bil yen. Reduction of the trade deficit has been stagnant since the middle of CY2023 due to improvement in terms of trade being at a standstill.

◆Export volume in April 2024 grew for the second consecutive month by +0.9% m/m. Exports of semicon machinery etc. grew supported by the recovery in the silicon cycle, while in addition, export volume of motor vehicles also helped push up overall performance, while only by a small margin. Domestic production of motor vehicles stalled temporarily due to procedural irregularities in certification applications involving some manufacturers. However, supply was pretty much back to normal by mid-April, bringing some positive effects. Looking at export volume by source of demand, exports declined to the US (-2.4%) but grew to the EU (+0.4%) and Asia (+0.6%).

◆Export volume is expected to shift into a growth trend in the latter part of the year. Exports to the US are maintaining a steady undertone, and Europe, where demand had been soft, is expected to see an acceleration in its GDP growth rate during the second half of the year. Meanwhile, exports of semiconductor related goods are also expected to grow thanks to the recovery of the silicon cycle. However, we continue to be wary of the risk that tighter Japanese export controls could reduce exports of advanced technology sectors to China and other countries.