Japan July Exports Up Y/Y for 8th Month; Trade in Surplus

     TOKYO (MNI) - Trade statistics from the Ministry of Finance released

Thursday.

     * Japanese exports rose 13.4% on year in July, as largely expected (the MNI

median economist forecast was for +13.6%). It was the eighth straight

year-on-year increase after +9.7% in June, reflecting a gradual pickup in global

growth. The increase was led by higher shipments of automobiles, ships and auto

parts.

     * Japanese officials expect a pickup in exports and production to continue

leading a modest recovery in the domestic economy.

     * Imports gained 16.3% on year vs. the MNI median forecast of +17.0%,

marking the seventh straight year-on-year rise after +15.5% in June, led by

increases in purchases of coal, liquefied natural gas, coal and computers.

     * The July trade balance came to a surplus of Y418.8 billion, which was

larger than the MNI median forecast for a Y392.0 billion surplus. It was the

second consecutive black ink after a surplus of Y439.8 billion in June and

compared with a surplus of Y504.5 billion in July 2016.

     * On a seasonally adjusted basis, exports rose 2.8% on month and imports

fell 1.2%.

     * Japan's economy for the April-June quarter posted high growth of 1.0% on

quarter, or an annualized 4.0%, as strong domestic demand -- led by consumption,

business investment and public investment -- offset what is seen as a temporary

slip in external demand, GDP data released Monday showed. But economists

forecast a gradual slowdown in the GDP growth rate toward 1% in Q3 onward as

consumer spending still lacks strength.

     * In Q2 GDP, net exports of goods and services -- exports minus imports --

made a negative 0.3 percentage point contribution to total domestic output.

Exports fell 0.5% on quarter in Q2 for the first drop in four quarters after

+1.9% in the first quarter, while imports rose 1.4% on strong domestic demand,

for the third consecutive rise after +1.3% in Q1.

     * Economists said the slowdown in April-June exports is expected to be

temporary and that telecommunications equipment exports are likely to pick up

toward year-end as demand for iPhone parts increases.

     * In the July trade data, exports to Asia +14.8% on year, the ninth

consecutive y/y rise, led by higher shipments of semiconductors and optical

equipment.

     * Exports to China +17.6%, the ninth straight y/y rise, led by optical

equipment and auto parts.

     * Exports to the U.S. +11.5%, the sixth straight rise, due to higher

shipments of automobiles, chip-making equipment and motors.

     * Exports to the European Union +8.3%, the sixth straight rise, on higher

shipments of auto parts, organic compounds (cosmetics, etc.) and metal working

machinery.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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