Japanese trade balance figures under pressure – UOB
|Senior Economist at UOB Group Alvin Liew assessed the latest Japanese trade balance figures for the month of July.
Key Quotes
“Japan’s Jul trade balance fell back into a deficit of JPY249.6bn (from a surplus of JPY589.6bn in Jun and worse than the Bloomberg median estimate of –JPY194.5bn). The deficit was due to another month of declining exports which contracted by 1.6% y/y (a marked improvement from the -6.6% in Jun and Bloomberg’s median estimate of -2.3%) while the decline in imports was less severe than projected, at -1.2% y/y (from -5.2% in Mar, and Bloomberg’s median estimate at -2.3%)”.
“Japan’s Jul export disappointment remains in line with global weak export picture. And despite the better than expected GDP growth in the latest 2Q 2019 quarter for Japan, the external demand weakness looks set to continue into 3Q, weighing down on Japan’s growth outlook for 2H this year. The weak Jul exports print continues to affirm our cautious outlook for Japan’s trade prospects in 2019 which may be exacerbated by the on-going US-led trade uncertainties (specifically the US-China trade dispute) and more recently, the Japan-South Korea souring trade relations”.
“We revised our Japan’s export to contract 3.4% in 2019 (from +4.1% in 2018) while import is now expected to contract 0.7% (from 9.7% in 2018). Previously, we expected zero export growth while imports growth to be a modest 2.5% this year. Based on these revised projections, Japan is likely to record another trade deficit, amounting to JPY 3.4 trillion in 2019 (from a trade deficit of JPY 1.2 trillion in 2018)”.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.