MNI BRIEF: Japan's Sept Exports Rise; Automobile Exports Surge

September export data continued to support the Bank of Japan's view that exports are trending higher as supply-side constrains wane, but banks officials are worried about a future slowdown caused by weaker overseas demand.

Japan's exports rose 28.9% y/y in September for the 19th straight rise following a 22.0% rise in August. Imports rose 45.9% y/y for the 20th straight gain following a 49.9% increase in August, data released on Thursday by the Ministry of Finance showed. (See MNI POLICY: BOJ To Lift FY22 CPI Forecast; Trim Growth View)

Automobile exports surged as Bank of Japan officials had expected in the wake of weakening supply-side constraints as the lockdowns in Shanghai were lifted. Exports of automobiles increased 122.2% y/y in September compared to a 39.3% rise in August, showing that automobile makers are increasing production as the semiconductor shortage eases.

Japan posted a trade deficit of JPY2.09 trillion in the wake of high resource prices, delivering the 14th straight deficit following a record deficit of JPY2.82 trillion in August.

Exports to China, Japan's largest trading partner, rose 17.1% in September for a fourth consecutive rise following a 13.4% increase in August. Exports of automobiles surged 336.8% in September following a gain of 55.2% in August.

Exports to the U.S. rose 45.2% in August for the 12th straight rise following a 33.8% rise in August. Exports of automobiles to the U.S. rose 118.8% compared to a 34.6% increase in the prior month.

Bank officials assess the U.S. economy to have remained solid despite the rate hikes by the Federal Reserve. However, they expect the U.S. economy to be hit by rapid and larger rate hikes, although the degree of economic downturn is unknown.