Japan – May exports

Exports in volume terms remain elevated compared with history. But JPY weakness means a lot of variation in export values, and also a rapid rise in the import bill.

Japan's USD export performance continues to be the weakest in the region, and on this basis, shipments fell last by -0.5% YoY. However, while also slowing YoY, export volumes ticked up in May MoM. And, helped by the weakness in the currency, export growth in JPY terms was stable last month at around 14% YoY.

As is the case in both Taiwan and Korea, Japan is benefiting from the strength in semiconductor demand (in Japan's case, that strength can be seen in exports of semiconductors themselves, as well as in shipments of semiconductor manufacturing equipment). But at least compared with Taiwan, Japan also has a big auto sector, and car shipments overall aren't going anywhere fast. Japan's exports to China have been weak in recent months, but export growth to the US and EU has been stronger.

As much as the weakness of the JPY is boosting local currency export earnings, it is joining with high commodity prices to turbocharge the import bill. As a result, Japan continues to record a trade deficit, only the second time that imports have exceeded exports in the last fifty years.