Japan: Merchandise exports rise for third month straight in February
Yen-denominated merchandise exports rose 7.8% year-on-year in February (January: +11.9% year-on-year). This meant that, for the third month running, exports have both expanded and exceeded market expectations. Strong exports of cars and semiconductors continued to drive growth. Meanwhile, merchandise imports increased 0.6% on an annual basis in February (January: -9.6% yoy).
As a result, the merchandise trade balance improved from the previous month, recording a JPY 0.4 trillion deficit in February (January 2024: JPY 1.8 trillion deficit; February 2023: JPY 0.9 trillion deficit).
Although goods exports beat expectations in January and February, the Consensus is for exports of goods and services to decline in Q1 in seasonally adjusted annualized terms. However, exports should then recover robustly from Q2 onward.
Analysts at Nomura commented:
“After adjusting for inflation and seasonality, we estimate that real exports fell by 2.3% m-m in February, falling again after a 3.9% decline in January. By our estimates, average monthly real exports in January and February were down 2.0% from the monthly average for the Oct–Dec 2023 quarter.”