Export Growth Softens, Volumes To Europe Down 20% Y/Y

Japan June trade figures showed weaker than expected export and import growth. Exports were +5.4% y/y, against a +7.2% forecast and +13.5% prior outcome. Imports were +3.2%y/y, against a +9.6% forecast, which was also close to the prior outcome. The headline trade position was better than expected at ¥224bn, (
-¥185.7bn forecast. The seasonally adjusted trade deficit of -¥816.8bn was close to expectations.

• Export growth has largely tracked sideways in y/y terms since the start of the year, although this is the weakest prince since Nov 2023. In volume terms, exports were -6.2% y/y, the weakest print since early last year.
• By country, EU export volumes are down -20.1%y/y and running negative to the US and China. Nominal outcomes were more positive for the US (+11% y/y) and China (+7.2%y/y), which were aided by the weaker yen. We still saw a negative outcome to the EU (-13.4%y/y) in nominal terms.
• Given yesterday's reports around potential chip export curbs to China, as the US considers fresh restrictions in the space, the country breakdown of export trends will be an on-going watch point.
• The seasonally adjusted trade balance looks liked it peaked in January of this year.