Japan Trade Balance Swings to Deficit

Japan recorded a trade deficit of JPY 231 billion in July of 2018, compared to a JPY 407 billion surplus in the same month a year ago and to market consensus of a JPY 50 billion gap.

Exports increased by 3.9 percent from a year earlier to JPY 6.75 trillion in July, down from a 6.7 percent rise in June and below expectations of a 6.3 percent gain. Export growth was observed for: machinery (4.8 percent), namely power generating machine (3.6 percent) and semicon machinery etc (13.7 percent); electrical machinery (7 percent), namely semiconductors (8 percent) and IC (9.7 percent); chemicals (10.9 percent); and manufactured goods (7.1 percent), namely iron and steel products (11.2 percent). In contrast, exports of transport equipment declined 4.0 percent, triggered by a 2.6 percent decline in car sales and a 29.8 percent drop in ships.

By country, exports rose to China (11.9 percent), Taiwan (4.4 percent), Hong Kong (6.1 percent), Thailand (0.6 percent), Singapore (3.8 percent) and the EU (6.4 percent), in particular Germany (5.2 percent) and the UK (7.6 percent). In contrast, exports to the United States fell 5.2 percent, marking the second straight drop in 18 months amid global trade tensions. Exports also declined to South Korea (-1.9 percent).

Meantime, imports jumped 14.6 percent to JPY 6.98 trillion, up from a 2.6 percent growth in June and slightly above market consensus of a 14.4 percent rise. July's climb was boosted by increases in purchases of: mineral fuels (30.7 percent), of which petroleum (40.3 percent), LNG (16.7 percent) and coal (13.3 percent); electrical machinery (7 percent), of which semiconductors (4 percent) and telephony, telegraphy (8.7 percent); others (8.4 percent), of which clothing and accessories (13.1 percent); chemicals (28.8 percent); machinery (6.6 percent); manufactured goods (11.9 percent), of which nonferrous metals (23.9 percent); and foodstuff (4.9 percent).

By country, imports rose from China (6.7 percent), the US (11 percent), the EU (29.1 percent) in particular Germany (29.2 percent) and France (26.6 percent), the Middle East (38.6 percent) in particular Saudi Arabia (21.9 percent) and the UAE (48.4 percent), South Korea (12.5 percent), Taiwan (4.5 percent) and Thailand (8.9 percent).

Japan Trade Balance Swings to Deficit

Mario | mario@tradingeconomics.com
8/16/2018 10:14:05 AM