Japan Real Time Charts and Data

Edward Hugh is only able to update this blog from time to time, but he does run a lively Twitter account with plenty of Japan related comment. He also maintains a collection of constantly updated Japan data charts with short updates on a Storify dedicated page Is Japan Once More Back in Deflation?

Wednesday, July 25, 2007

June Trade Surplus

Well, Japan's trade surplus powered ahead again in June, up 53.4% from June 2006, according to Bloomberg.

Japan's trade surplus surged in June as a weaker yen and higher overseas demand for electronics and cars helped exports rise at the fastest pace in five months.The surplus expanded 53.4 percent to 1.23 trillion yen ($10.2 billion) from a year earlier, the Ministry of Finance said in Tokyo.

Other points of note were that while exports climbed 16.2%, imports gained only 10.7% which was significantly below market expectations. The weaker import reading reflects both the weakness in the yen (and hence the relative cost of imported products) and ongoing weakness in domestic demand.

It is also worth bearing in mind that export volumes, which don't take into account price and currency fluctuations, rose only 6.1% y-o-y in June, and thus that a significant part of the increase in the surplus comes not from increased output, but from the increased yen value of sales prices in other currencies.

Exports to the U.S. rose 6.7% y-o-y in June after barely rising in May and falling in April for the first time in two years. This slower rate of increase to the US is in part a result of the fact that domestic demand has been weaker there of late, and of the fact that the USD has also been falling relative to other currencies, so the "cheap yen" factor isn't so important there. Exports to the European Union, OTOH, climbed 16.3% to reach a total of 1.08 trillion yen, the second highest value on record, and here of course the relative currencies values really do matter, as both the euro and the pound sterling have risen sharply in recent months.

It is almost possible to say that in some measure Japan now has an automatic hedge here, since, as long as the BoJ rates don't rise too much, and as long as Japanese retail investors keep sending funds out in the search for yield, then the yen should stay at a comparatively low level, and if the value vis-a-vis the euro rises this can only be because the US economy starts to pick up again, the dollar starts to rise again, and hence the Yen-dollar crossover moves in the direction of a weaker yen. In other words, at the present time Europe is picking up the slack for weaknesses in the US economy.

Shipments to China also continue to be important, and these surged 22.6% to a record 1.13 trillion yen while exports to the rest of Asia gained 15.8%.