MNI BRIEF: Japan Dec Exports Post 22nd Rise; Auto Exports Slow

December exports data support the Bank of Japan's view that exports are trending higher as supply-side constraints ease, but bank officials are worried about the impact of a slowing global economy in the first and second quarters of 2023.

Bank officials expect a slowdown in the U.S. economy caused by Federal Reserve rate hikes to become more apparent this year, slowing an increase in Japan’s exports, although bank officials don’t expect to see a big economic downturn.

Japan's exports rose 11.5% y/y in December for the 22nd straight rise following a 20% rise in November. Imports rose 20.6% for the 23rd straight gain following an increase of 30.3% in November, data released on Thursday by the Ministry of Finance showed.

Japan posted a trade deficit of JPY1.45 trillion in the wake of high resource prices for the 17th straight deficit following a deficit of JPY2.03 trillion in November.

Exports of automobiles rose 17.9% y/y in December, slowing from a gain of 38.3% in November, showing that automobile makers are reducing their production as semiconductor shortages continued.

Exports to China, Japan's largest trading partner, fell 6.2% in December for the first drop in seven months following a rise of 3.5% in November. Exports of automobiles fell 50.2% in December, reversing a 11.3% gain in November and reflecting slower economy due to the spread of Covid-19.

Exports to the U.S. rose 16.9% in December for the 15th straight rise following a 32.6% increase in November. Exports of automobiles to the U.S. rose 16.2% vs. 41.1%.