Japan: Contraction in exports continues to soften in September
Yen-denominated merchandise exports fell 4.9% in annual terms in September, on the heels of August’s 14.8% plunge. Nevertheless, September´s result marked the mildest contraction since February 2020. Meanwhile, imports plunged 17.2% on an annual basis in September (August: -20.8% yoy). As a result, the merchandise trade balance, recorded a JPY 0.7 trillion in September (August: JPY 0.2 trillion). Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a JPY 1.6 trillion deficit in September, compared to the JPY 2.4 trillion deficit in August.
Regarding the outlook and impact on economic growth, Hiromichi Shirakawa and Takashi Shiono, economists at Credit Suisse, commented:
“In our current estimate, Japan’s real GDP made a very strong rebound of around 24% qoq annualized in the 3Q 2020, helped by expansions of exports and domestic personal consumption, and today’s trade data were more or less consistent with this GDP estimate. Looking ahead, although we expect real exports to remain on a recovery path during the current quarter, we think that the recovery pace is likely to decelerate as the phase of rebound is over.”