Japan: Exports grow at rapid albeit softer rate in June
July 21, 2021
Yen-denominated merchandise exports jumped 48.6% annually in June, hot on the heels of May’s 49.6% upturn, which had marked the strongest increase in over 30 years. Meanwhile, imports jumped 32.7% on an annual basis in June, accelerating from May’s 27.9% increases and marking the best result since May 2010. Both of June’s readings were aided by a healthy base effect, with June 2020 having coincided with a sharp pandemic-induced decline in trade volumes.
As a result, the merchandise trade balance improved, recording a JPY 0.4 trillion surplus in June (May 2021: JPY 0.2 trillion deficit; June 2020: JPY 0.3 billion deficit). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a JPY 3.8 trillion surplus in June, compared to the USD 3.2 billion surfeit in May.
Regarding the outlook for the external sector, analysts at Nomura commented:
“Japan's real exports have already recovered to more or less the pre-pandemic level (2019 average), but there is still room for exports to recover as the level is still low when viewed in relation to real GDP levels in its major trading partners, namely the US, China, and EU. We expect real export growth to accelerate again from 2021 H2.”
Author: Stephen Vogado, Economist