Trade Balance in Japan
Japan - Trade Balance
Exports contract for seventh month running in June, weighed by trade tensions
Nominal yen-denominated merchandise exports fell 6.7% year-on-year in June, up from May’s 7.8% decline. The result was the seventh consecutive contraction and was larger than the 5.4% drop that market analysts had expected. The contraction came amid ongoing trade tensions between China and the United States, as well as a slowdown in the EU.
Meanwhile, imports fell 5.2% in annual terms in June. The reading was sharply down from the 1.5% decline logged in May and the 0.2% fall expected by market analysts.
As a result of the notable decline in exports, the merchandise trade surplus fell from JPY 0.7 trillion in June 2018 to JPY 0.6 trillion in June 2019 (May 2019: JPY 1.0 trillion deficit). Meanwhile, the 12-month trailing trade deficit rose from JPY 2.6 trillion in May to JPY 2.7 trillion in June.
Commenting on the reading, researchers at Nomura appeared to remain relatively pessimistic regarding short-term prospects for the external sector. According to their calculations, real exports only rebounded mildly in Q2 in quarter-on-quarter terms, after a sharp decline in Q1. They further noted that “Leading indicators of exports […] do not suggest that exports have begun heading upward, and there is still a great deal of uncertainty regarding the trade conflict between the US and China. We therefore think real exports are likely to continue to trend low in Jul-Sep onward.”
Our panelists forecast that exports will expand 0.7% in 2019 and imports will rise 1.7% compared to the previous year, bringing the trade balance to post a surplus of USD 7.0 billion. In 2020, FocusEconomics panelists expect exports will expand 4.2%, while imports will rise 5.3%, prompting the trade balance to swing to a deficit of USD 0.8 billion.
Japan - Trade Balance Data
|Trade Balance (USD billion)||-88.9||-101.3||-7.6||48.4||44.4|
5 years of economic forecasts for more than 30 economic indicators.
Japan Trade Balance Chart
Source: Ministry of Finance and FocusEconomics calculations.
|Bond Yield||-0.16||-4.41 %||Jul 31|
|Exchange Rate||108.8||-0.35 %||Jul 31|
|Stock Market||21,522||0.40 %||Jul 31|
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July 31, 2019
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Consumer sentiment declined from 38.7 in June to 37.8 in July.
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