Japan Trade Balance July 2021


Japan: Exports grow at a milder pace in July

August 18, 2021

Yen-denominated merchandise exports rose 37.0% on an annual basis in July, slowing slightly from June’s 48.6% surge. Meanwhile, imports increased 28.5% in annual terms in July, moderating from June’s 32.7% rise. Both of July’s readings were aided by a healthy base effect, with July 2020 having coincided with a sizeable pandemic-induced decline in trade volumes.

As a result, the merchandise trade balance improved, recording a JPY 0.4 trillion surplus in July (June 2021: JPY 0.3 trillion deficit; July 2020: JPY 0.1 billion deficit). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a JPY 4.2 trillion surplus in July, compared to the USD 3.8 billion surfeit in June.

Regarding the outlook for the external sector, analysts at Nomura commented:

“Real exports appear to have been hampered in July by economic conditions overseas, where the pandemic has resurged, and we expect the situation to continue for now. […] However, vaccination rates are also increasing in many countries, and as vaccination rollout is expected to enable the easing of restrictions on people’s movements […] we think economies outside of Japan will once again enter a recovery path. We forecast a return to accelerated recovery in real exports on a qoq basis from October–December.”

Our panelists forecast that exports will increase 13.3% in 2021 and imports will increase 12.1%, bringing the trade balance to a surplus of USD 37.5 billion. In 2022, our panelists expect exports to expand 6.2% and imports to expand 7.3%, pushing the trade surplus to USD 32.3 billion.

Author:, Economist

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Japan Trade Balance Chart

Japan Trade12m July 2021

Note: 12-month sum of trade balance in USD billion and annual variation of the 12-month sum of exports and imports in %.
Source: Ministry of Finance and FocusEconomics calculations.

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