Japan: Exports decrease at milder rate in August
September 16, 2020
Yen-denominated merchandise exports sank 14.8% year-on-year in August, moderating from July’s 19.2% drop. August´s outturn marked the softest decline since March 2020. Meanwhile, imports slid 20.8% over the same month last year in August (July: -22.3% yoy). As a result, the merchandise trade balance inched up, recording a JPY 0.2 trillion surplus in August (July: JPY 0.0 trillion). Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a JPY 2.4 trillion deficit in August, compared to JPY 2.8 trillion deficit in July.
Regarding the ameliorating export panorama, analysts at Nomura commented:
“Real exports were up for a third straight month in August. We think a clear bottom in exports is coming into focus in Jul-Sep. […] Looking ahead, however, we think that the rise in exports will get smaller once the pent-up demand from the periods of restrictions on economic activities, such as city lockdowns, dies down. In fact, the extent of the m-m rise in exports to the US in August was down from July. We also think that it will be difficult to quickly raise the level of economic activity in the near term due to concerns about COVID-19 picking up again. We continue to forecast a moderate rate of recovery in overseas demand.“
Author: Stephen Vogado, Economist