Japan’s Ministry of Finance released preliminary trade data on Thursday, showing a trade surplus of 224 billion yen (about 1.4 billion dollars) for the month of June. This marks the first trade surplus in three months, highlighting a recovery in exports.
In June, exports grew by 5.4% to reach 9.2 trillion yen (approximately 590 billion dollars), marking seven consecutive months of growth. However, the growth rate was lower than the market’s expected 7.2%. Exports of manufacturing equipment such as semiconductors, non-ferrous metals, and plastics saw increases.
Import growth slowed down due to the depreciation of the yen. Imports in June increased by 3.2% to reach 8.98 trillion yen (around 580 billion dollars), marking the third consecutive month of growth. Computers (including peripherals), prime movers, and communication equipment made positive contributions.
By region, exports to the United States increased by 11%, reaching 1.9 trillion yen. Exports to China continued to grow for the seventh consecutive month by 7.2%, with overall exports to Asia increasing by 7.7%. Exports to the European Union, however, decreased by 13.4%.
In terms of quantity, export volume decreased by 6.2%, marking the fifth consecutive month of negative growth; while import volume decreased by 8.9%. This suggests that the growth in export value was primarily driven by price increases rather than high demand.
According to preliminary data published by the Bank of Japan last week, in yen terms, Japan’s export prices in June increased by 10.4% compared to the same period last year. Due to the weak yen and rising prices of commodities like oil and copper, import prices rose by 9.5%.
The Ministry of Finance also published the trade balance for the first half of the year (January to June 2024), showing import growth of 0.8% to reach 54.7 trillion yen (about 350 billion dollars); and export growth of nearly 9% to reach 51.5 trillion yen (around 330 billion dollars). The trade deficit decreased by 53.7% compared to the same period last year, dropping to 3.23 trillion yen (approximately 21 billion dollars).
Since the second half of 2021, Japan has been experiencing a trade deficit for three consecutive fiscal years, mainly due to the weak yen and global price hikes. Japan’s fiscal year runs from April to March.
Overall, the weak yen has boosted Japan’s exports but has weakened purchasing power for imports. The US dollar exchange rate has been steadily increasing this year, recently surpassing the 160-yen level. On Thursday, the dollar was trading at around 156 yen, a depreciation of 12.5% compared to the same period last year.