Japan: Merchandise exports rise for fourth consecutive month in March
Yen-denominated merchandise exports rose 7.3% year-on-year in March (February: +7.8% yoy). As a result, exports have expanded—and at a faster rate than the market had expected—for four months in a row. Robust shipments of cars and semiconductors continued to drive growth. That said, the print was likely boosted by the plunging value of the yen—in volume terms, exports fell 2.1% year on year in March. Meanwhile, merchandise imports dropped 4.9% on an annual basis in March (February: +0.5% yoy).
As a result, the merchandise trade balance improved from the previous month, recording a JPY 0.4 trillion surplus in March (February 2024: JPY 0.4 trillion deficit; March 2023: JPY 0.8 trillion deficit).
Despite goods exports growth in nominal terms beating expectations in January, February and March, the Consensus is for exports of goods and services to decline over Q1 as a whole in real, seasonally adjusted, annualized terms. However, exports should rebound in Q2 and grow robustly in the second half of the year as global demand for electronics picks up.
Analysts at Nomura commented:
“After adjusting for inflation and seasonality, we estimate that real exports rose by 2.8% m-m in March, up for the first time in three months. On a quarterly basis, exports fell 3.1% q-q in Jan–Mar 2024. In our current forecasts, we envision a 3.4% decline in real exports of goods and services in the Jan–Mar 2024 GDP statistics, and a 2.7% decline in real exports of goods. It thus appears that real exports of goods may have fallen slightly short of our forecast.”