MNI BRIEF: Japan May Exports Slow But Auto Exports Rise

Japan recorded slower export growth in May of 0.6% y/y – 27th straight monthly gain – down from April's 2.6% increase, due to a decline in overseas demand.

The Bank of Japan anticipated the deceleration as the U.S. economy slows, which has put downward pressure on Japan’s exports and production.

The Ministry of Finance data released today also showed imports had fallen 9.9% y/y for the second straight drop following April's 2.3% fall – the first drop in 27 months. Japan posted a trade deficit of JPY1.37 trillion, down 42% y/y, the 22nd straight deficit following a JPY432.3 billion gap in April.

Exports of automobiles rose 66.3% y/y in May, accelerating from 29.2% in April, showing that carmakers are increasing production as supply-side restrictions ease. Exports to China, Japan's largest trading partner, also fell 3.4% in May for the sixth straight drop following April's 2.9% fall.

Exports of automobiles rose 50.5% in May, reversing from a 27.3% decline the previous month. Exports to the U.S. rose 9.4% in May for the 20th straight rise following the 10.5% increase in April. Exports of automobiles to the U.S. surged 81.9% compared to 23.1% in April.