If we look at the above chart then the impact of the sudden shock to the whole system which occured in August is evident in September, but beyond that is we look at the slope of the (red) exports line, we will see that it has been steadily drifting down since last May/June, despite the fact that it is holding up well. What this should tell us is that the Japanese economy - which is at the end of the day export dependent - is steadily losing momentum.
Along with the overall growth in exports, what is perhaps even more interesting is the overall distribution of those exports. Export's to Asia as a whole were up at a 13.9 percent annual rate in February, from an 8.l percent one in January. Shipments to China rose 14.9 percent, and sales to Europe gained 7.2 percent. Exports to the U.S., on the other hand, were down 6 percent from a year earlier, a sixth monthly decline, reflecting the declining general importance of the US economy as a global customer.
But it is the recent performance of individual countries as customers that is most striking, like, for example, Australia (up 26% y-o-y), Indonesia (33%, the base is still lowish, but the potential seems huge), Vietnam (88.7%), India (40.1%, ditto Indonesia), Latin America - Brazil (38.5%) and Chile (37%), - Russia (41.4%), CEE (36.2%). In general one has the impression that, while Japan's exports will undoubtedly be affected at some point but events elsewhere, it's export growth base is much better distributed than that of the other export oriented powerhouse - Germany - which is far to dependent on Russia and Eastern Europe, in my view, and hence on any unfortunate corrections which may occur there. Anyone interested in making a comparison between Germany and Japan in this regard could do worse than taking a look at my recent post on the German export phenomenon.
