Japan Trade Balance May 2021


Japan: Exports skyrocket in May on low base effect

June 16, 2021

Yen-denominated merchandise exports soared 49.6% annually in May, on the back of April’s 38.0% jump. May’s reading marked the strongest increase in over 30 years, although it was aided by a healthy base effect, with May 2020 having coincided with a sharp pandemic-induced decline in trade volumes. Meanwhile, imports jumped 27.9% on an annual basis in May (April: +12.8% yoy), marking the best result since May 2010.

As a result, the merchandise trade balance fell to a JPY 0.2 trillion deficit in May (April 2021: JPY 0.3 trillion surplus; May 2020: JPY 0.9 trillion deficit). Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a JPY 3.2 trillion surplus in May, compared to the JPY 2.5 trillion surplus in April.

Regarding the outlook for the external sector, Makoto Tsuchiya and Shigeto Nagai, economists at Oxford Economics, commented:

“While supply chain disruptions in the car industry will continue to exert pressure on the sector in the short term, we are optimistic about the overall external outlook as robust Chinese demand, a buoyant manufacturing sector, and US President Joe Biden’s fiscal plans will all provide support.”

Our panelists forecast that exports will increase 13.9% in 2021 and imports will increase 13.0%, bringing the trade balance to a surplus of USD 35.9 billion. In 2022, our panelists expect exports to expand 7.1% and imports to expand 7.2%, pushing the trade surplus to USD 37.8 billion.

Author:, Economist

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Japan Trade Balance Chart

Japan Trade12m May 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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