Japan: Exports contract at fastest pace in over two years in December
January 23, 2019
Nominal yen-denominated merchandise exports fell 3.8% year-on-year in December, contrasting the 0.1% increase in November. The contraction was larger than the 1.9% drop that market analysts had expected and represented the sharpest decline since November 2016. The decline reflected weaker shipments of industrial supplies and a sharper contraction in capital equipment exports.
Meanwhile, import growth decelerated from 12.5% in November to 1.9% in December. The reading undershot market expectations of a 3.7% increase.
As a result of the contraction in exports, the merchandise trade balance swung from a JPY 0.4 trillion surplus in December 2017 to a deficit of JPY 0.1 trillion in December 2018 (November 2018: JPY 0.7 trillion deficit). Meanwhile, the 12-month trailing trade deficit fell from JPY 0.8 trillion in November to JPY 1.2 trillion deficit in December, marking the worst result in nearly three years.