Japan: January trade deficit was larger than expected - BBH

Research Team at BBH notes that the Japan reported its January trade balance earlier today and the trade deficit was larger than expected, as exports disappointed and imports surprised on the upside. 

Key Quotes

“It was the first deficit since last August.  There is a large seasonal component, and in most commentary it is attributed to the Chinese New Year.  We are a bit skeptical and note that for more than 20-years, which means that even before China became Japan's largest trading partner, the seasonal pattern was evident.   The January trade balance always deteriorates from December.  Moreover, Japan's exports rose to China (3.1% year-over-year) while shipments to the US and Europe fell (6.6% and 5.6% respectively).  Exports of motor vehicles fell 6.7% year-over-year in value terms.  Crude oil imports surged 36^ in value terms.  Exports were off 0.3% in volume terms.    The shortfall of JPY1.087 trillion was the largest since January 2015.”