Monday November 20 2017
Japan October Trade Surplus Narrows 41% YoY
Ministry of Finance, Japan | Chusnul Ch Manan | chusnul@tradingeconomics.com

Japan's trade surplus narrowed 40.7 percent to JPY 285.4 billion in October 2017 from JPY 481.26 billion in the same month a year earlier and below market consensus of a JPY 330 billion surplus. Exports rose 14 percent from a year earlier to JPY 6,693.1 billion while imports increased at a faster 18.9 percent to JPY 6,407.7 billion.

Exports from Japan rose 14 percent from the previous year to JPY 6,693.1 billion in October, easing from a 14.1 percent gain in the previous month and missing market expectations of 15.8 percent. It was the 11th consecutive increase in exports, mainly boosted by a surge in exports of cars (6 percent), parts of motor vehicles (6.5 percent), and chemical products (23.4 percent). Also, sales of machinery went up 17.8 percent, boosted by power generating machine (10.5 percent) and semicon machinery (29.5 percent). Sales of manufactured goods increased by 15.2 percent, led by iron and steel products (15.6 percent). In addition, exports of electrical machinery rose 11.4 percent, mainly driven by semiconductors (9.1 percent) and IC (10.5 percent). Exports of others rose 16.5 percent, driven by scientific, optical instruments (16.1 percent).
 
Among major trading partners, exports rose to China (26 percent); the US (7.1 percent); the EU (15.8 percent), of which Germany (10.2 percent); the ASEAN (19.5 percent), South Korea (18.3 percent), and Taiwan (4.8 percent).
 
Imports to Japan rose at a faster 18.9 percent to JPY 6,407.7 billion, accelerating from a 12 percent expansion in the previous month and missing expectations of 20.2 percent. Imports grew for mineral fuels (37.5 percent), of which petroleum (43 percent), LNG (15.5 percent) and coal (36.6 percent); electrical machinery (15 percent), of which semiconductors (23 percent) and IC (33.3 percent); foodstuff (21.1 percent); raw materials (17. 5 percent); chemicals (9.5 percent); manufactured goods (17.1 percent), of which nonferrous metals (28.4 percent); machinery (10.3 percent); transport equipment (1.9 percent); and others (21.1 percent).
 
Among major trading partners, imports rose from China (14.3 percent); the US (3.1 percent); the ASEAN (21.8 percent); Taiwan (22.7 percent); South Korea (12.2 percent); the EU (18.1 percent), of which Germany (19.8 percent) and Australia (12.6 percent).
 




Wednesday November 15 2017
Japan GDP Growth Slows to 0.3% in Q3
Cabinet Office l Rida Husna | rida@tradingeconomics.com

The Japanese economy advanced 0.3 percent on quarter in the three months to September of 2017, following a 0.6 percent expansion in the previous period and matching market consensus, the preliminary estimate showed. Growth was mainly supported by exports while business spending rose at a slower pace and private consumption fell for the first time in near two years.

The positive contribution to GDP largely came from net exports (0.5 percentage points). On the other hand, household consumption substracted 0.3 percentage points from the growth while capital expenditure and government spending gave no contribution to growth. Meanwhile, changes in private inventories added 0.2 percentage points from quarterly growth. 

Private consumption declined by 0.5 percent, following a 0.7 percent increase in the second quarter and worse than expectations of a 0.4 percent drop. It marked the first decline in private spending since the fourth quarter 2015, due to adverse weather.

Government expenditure contracted 0.1 percent, after a 0.6 percent growth in the prior three months. Meanwhile, public investments slumped by 2.5 percent, after increasing 5.8 percent in Q2.

Business spending rose 0.2 percent, much slower than a 0.5 percent growth  in the June quarter while market expected a 0.3 percent rise. Meantime, private residential investment contracted by 0.9 percent, reversing from a 1.1 percent  gain in the third quarter.

Exports of goods and services grew by 1.5 percent, swinging from a 0.2 percent fall in Q2; while imports dropped by 1.6 percent, following a 1.4 percent gain in the previous three-month period.

On an annualised basis, the GDP expanded 1.4 percent, compared to an upwardly revised 2.6 percent growth in the third quarter and slightly above estimates of a 1.3 percent expansion. The Japanese economy has now expanded in seven straight quarters, the longest period of uninterrupted growth in more than a decade.




Tuesday October 31 2017
BoJ Holds Monetary Policy Steady; Trims Inflation Outlook
Bank of Japan | Rida Husna | rida@tradingeconomics.com

The Bank of Japan left its key short-term interest rate unchanged at -0.1 percent at its October 2017 meeting, as expected. Policymakers also kept its 10-year government bond yield target around zero percent but trimmed inflation forecast to 0.8 percent for fiscal 2017 from 1.1 percent, as firms' wage and price-setting stance has remained cautious.

With regard to the amount of JGBs to be purchased, the Bank will conduct buying at more or less the current pace -- an annual pace of increase of about 80 trillion yen.

The BoJ also determined by a 8-1 vote to purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at an annual paces of about JPY 6.0 trillion and about JPY 90 billion, respectively. As for CP and corporate bonds, the Bank will maintain their amounts outstanding at about 2.2 trillion yen and about 3.2 trillion yen respectively.  

Meanwhile in a quarterly review of the central bank's forecasts, the BoJ lowered its core CPI forecast for fiscal 2017 to 0.8 percent from the previous estimate of 1.1 percent, mainly due to the effects of a reduction in changes for mobile phones. At the same time, firms' wage and price-setting stance has remained cautious despite the steady tightening of labor market and the high levels of corporate profits. Meanwhile the timing for inflation to reach 2 percent will likely be around fiscal 2019. Regarding the GDP, the central bank said the projected growth rates are more or less unchanged from an earlier projection.

Excerpts from the Outlook for Economic Activity and Prices:

Japan's economy is likely to continue its moderate expansion. Through fiscal 2018, domestic demand is likely to follow an uptrend, with a virtuous cycle from income to spending being maintained in both corporate and household sectors on the back of highly accommodative financial conditions and fiscal spending through the government's large stimulus measures. Business fixed investment is likely to continue increasing moderately, supported by acccommodative financial conditions, heightened growth expectations and increases in Olympic Games-related investment, as well as in labor-saving investment to address the labor shortage. Private consumption is also expected to follow a moderate increasing trend as emplyment and income situation continues to improve. Public investment is projected to increase in fiscal 2017, due to positive effects resulting from  a set of stimulus measures. At the same time, exports are expected to continue their moderate increasing trend on the back of such growth in overseas economies.

For fiscal 2018, the economy is expected to expand by 1.4 percent, unchanged from an earlier projection. Core CPI for the year is projected to   rise by 1.4 percent, down slightly from an earlier forecast of 1.5 percent. 






Tuesday October 31 2017
Japan Jobless Rate Steady at 2.8% for 4th Month
Statistics Japan l Rida Husna | rida@tradingeconomics.com

The unemployment rate in Japan came in at 2.8 percent in September of 2017, the same as in the prior three months. The figure was in line with market consensus and remained at its lowest in 23 years. Meanwhile, the jobs-to-applicants ratio was at 1.52, unchanged from the previous period while market expected 1.53. It stayed at its highest level since February 1974.

Compared to the previous month, there were 1.88 million unemployed persons, 2 thousand more than in August. Employment declined by 15 thousand to 65.50 million, after rising by 20 thousand in a month earlier. The labour force fell by 13 thousand to 67.38 million while those detached from the labour force went up by 14 thousand to 43.65 million.

Among people aged 15 to 24 years old, the jobless rate increased to 5.1 percent from 4.8 percent in August.

A year earlier, unemployment was higher at 3.0 percent.




Friday October 27 2017
Japan Inflation Rate Steady at 0.7% in September
Ministry of Internal Affairs & Communications | Chusnul Ch Manan | chusnul@tradingeconomics.com

Consumer prices in Japan rose 0.7 percent year-on-year in September of 2017, the same as in the prior month and matching market consensus. Prices of food increased at a faster pace while cost of transport was flat and cost of housing continued to fall.

In September, prices of food increased at a faster 1 percent from a year earlier (from 0.9 percent rise in August), namely, fresh food (1.2 percent from 0.8 percent), fish and seafood (5.6 percent from 4.2 percent) and fresh fruits (3.6 percent from 3.4 percent). In addition, prices fell at a slower pace for dairy product and eggs (-0.4 percent from -0.6 percent).
 
Meantime, prices increased more than in a month earlier for: fuel, light and water charges (6 percent from 5.2 percent in August), mainly due to higher electricity cost (7.9 percent from 7.0 percent).

On the other hand, cost went up at a slower pace for culture and recreation (0.2 percent from 0.4 percent); inflation was steady for education (0.4 percent), medical care (1.8 percent); and prices of transport & communication were flat (from -0.4 percent). Also, cost fell for: housing (-0.2 percent from -0.2 percent), furniture and household utensils (-0.2 percent from -0.2 percent), and clothing and footwear (-0.3 percent from 0.6 percent).
 
Core consumer prices, which exclude fresh food, rose 0.7 percent on the year, the same pace as in August and below market estimates of a 0.8 percent rise. It still remained the highest level since March of 2015.
 
On a monthly basis, consumer prices were flat compared to a 0.2 percent rise in the preceding month.
 
In Tokyo, consumer prices fell 0.2 percent year-on-year while markets estimated of a 0.1 percent increase. Core consumer prices, which exclude fresh food went up by 0.6 percent and above market consensus of a 0.5 percent rise.




Thursday October 19 2017
Japan Trade Surplus Widens 37.7% in September
Mario | mario@tradingeconomics.com

Japan's trade surplus widened to JPY 670.17 billion in September 2017 from JPY 486.59 billion in the same month a year earlier and above market consensus of a JPY 559.8 billion surplus.

Exports from Japan rose 14.1 percent from the previous year to JPY 6,811.0 billion in September, easing from a 18.2 percent gain in the previous month and missing market expectations of 14.9 percent. It was the 10th consecutive increase in exports, mainly boosted by a surge in exports of cars (2.8 percent), parts of motor vehicles (10.8 percent) and chemical products (24.7 percent). Also, sales of machinery went up 17.4 percent, boosted by power generating machine (19.6 percent) and semicon machinery (19.3 percent). Sales of manufactured goods increased by 16.7 percent, led by iron and steel products (15.5 percent). In addition, exports of electrical machinery rose 14.6 percent, mainly driven by semiconductors (12.3 percent) and IC (16.3 percent). Exports of others rose 17 percent, driven by scientific, optical instruments (14 percent).

Among major trading partners, exports rose to China (29.3 percent); the US (11.1 percent); the EU (11.5 percent), of which Germany (18.3 percent); South Korea (17.3 percent) and Taiwan (4.7 percent). 

Imports to Japan rose at a softer 12 percent to JPY 6,140.8 billion, slowing down from a 15.2 percent expansion in the previous month and missing expectations of 15 percent. Imports grew for mineral fuels (19 percent), of which petroleum (15 percent), LNG (8.6 percent) and coal (41.8 percent); electrical machinery (2.5 percent), of which semiconductors (16.8 percent) and IC (27.1 percent); foodstuff (15.9 percent); raw materials (15.2 percent); chemicals (11.3 percent); manufactured goods (12.8 percent), of which nonferrous metals (28.2 percent); machinery (19 percent); transport equipment (14.3 percent); and others (7.5 percent).

Among major trading partners, imports rose from China (1.6 percent); the US (17.2 percent); Taiwan (19 percent); South Korea (18 percent); the EU (15.3 percent), of which Germany (17.1 percent) and Australia (16.3 percent).


Friday September 29 2017
Japan Jobless Rate Steady at 2.8% for 3rd Month
Statistics Japan l Rida Husna | rida@tradingeconomics.com

The unemployment rate in Japan came in at 2.8 percent in August of 2017, the same as in the prior two months. The figure was in line with market consensus and remained at its lowest in 23 years. Meanwhile, the jobs-to-applicants ratio was at 1.52, unchanged from the previous period while market expected 1.53. It stayed at its highest level since February 1974.

Compared to the previous month, there were 1.86 million unemployed persons, 4 thousand less than in July. Employment increased by 20 thousand to 65.65 million, after rising by 140 thousand in July. The labour force increased by 15 thousand to 67.51 million while those detached from the labour force went down by 16 thousand to 43.51 million.

Among people aged 15 to 24 years old, the jobless rate edged down to 4.8 percent from 4.9 percent in July.

A year earlier, unemployment was higher at 3.1 percent.


Friday September 29 2017
Japan Inflation Rate at 29-Month High of 0.7% in August
Statistics Japan l Rida Husna | rida@tradingeconomics.com

Consumer prices in Japan rose 0.7 percent year-on-year in August of 2017, following a 0.4 percent rise in the prior four months and matching market consensus. It was the highest inflation rate since March 2015, mainly driven by a faster rise in cost of food.

In August, prices of food increased at a faster 0.9 percent from a year earlier (from 0.6 percent rise in July, namely, fresh food (0.8 percent from -1.1 percent), fish and seafood (4.2 percent from 4.9 percent) and fresh fruits (3.4 percent from 0.9 percent). In addition, prices fell at a slower pace for fresh vegetables (-3.4 percent from -6.6 percent).

Meantime, prices increased more than in a month earlier for: fuel, light and water charges (5.2 percent from 4.3 percent in July), mainly due to higher electricity cost (7.0 percent from 6.1 percent). Also, cost of clothing and footwear went up at a faster 0.6 percent, after a flat reading in July. Cost of medical care rose 1.8 percent, much higher than a 0.1 percent rise in August. In addition, cost rebounded for culture and recreation (0.4 percent from -0.1 percent). Inflation was steady for education (0.4 percent). 

On the other hand, cost fell for: housing (-0.2 percent from -0.2 percent), furniture and household utensils (-0.2 percent from -0.4 percent) and transport & communication (-0.4 percent from 0.1 percent) 
  
Core consumer prices, which exclude fresh food,  rose 0.7 percent on the year from 0.4 percent in July and in line with market estimates. It was the highest level since March of 2015.

On a monthly basis, consumer prices went up 0.2 percent, compared to a flat reading in the preceding three months.

In Tokyo, consumer prices rose 0.5 percent in a month earlier while markets estimated a 0.6 percent increase. Core consumer prices, which exclude fresh food, also increased by 0.5 percent and in line with consensus.


Thursday September 21 2017
BoJ Leaves Monetary Policy Unchanged
Bank of Japan l Rida Husna | rida@tradingeconomics.com

The Bank of Japan left its key short-term interest rate unchanged at -0.1 percent at its September 2017 meeting, hours after the Federal Reserve announced a plan to begin selling some of the assets on its balance sheet beginning in October. Policymakers also kept its 10-years government bond yield target around zero percent and maintained its upbeat view on private consumption and overseas economies.

With regard to the amount of JGBs to be purchased, the Bank will conduct buying at more or less the current pace -- an annual pace of increase of about 80 trillion yen.

The BoJ also determined by a 8-1 vote to purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at an annual paces of about JPY 6.0 trillion and about JPY 90 billion, respectively. As for CP and corporate bonds, the Bank will maintain their amounts outstanding at about 2.2 trillion yen and about 3.2 trillion yen respectively.  

New board member Goushi Kataoka dissented to the BOJ's decision to keep its interest rate targets, saying current monetary policy was insufficient to bring inflation to 2 percent during fiscal 2019.

Excerpts from the Statement by the Bank of Japan:

Japan's economy is expanding moderately. Overseas economies have continued to grow at moderate pace on the whole. In this situation, exports have been on an increasing trend. On the domestic demand side, business fixed investment has been on a moderate increasing trend with corporate profits improving.  Private consumption has increased its resilience against the background of steady improvement in the employment and income situation. Meanwhile, public investment have been increasing and housing investment has been more or less flat. Reflecting these increases in demand both at home and abroad, industrial production has been on an increasing trend, and labor market conditions have continued to tighthen steadily. Financial conditions are highly accommodative. On the price front, the year-on-year rate of change in the consumer price index (CPI, all items less fresh food) is around 0.5 percent. Inflation expectations have remained in a weakening phase.

With regard to the outlook, Japan's economy is likely to turn to a moderate expansion. Domestic demand is likely to follow an uptrend, with a virtuous cycle from income to spending being maintained in both the household and corporate sectors, on the back of highly accommodative financial conditions and fiscal spending through the government's large scale stimulus measures. Exports are expected to continue their moderate increasing trend on the back of an improvement in overseas economies. The year-on-year rate of change in the CPI is likely to continue on an uptrend and increase toward 2 percent, mainly on the back of an improvement in the output gap and a rise in medium-to long-term inflation expectations.

Risks to the outlook include the following: the US economy policies and the impact on global financial markets; developments in emerging and commodity-exporting economies; negotiations on the United Kingdom's exit from the European Union (EU) and their efects; prospects regarding the European debt problem, including the financial sector, and geopolitical risks.

The Bank will continue with "Quantitative and Qualitative Monetary Easing (QQE) with a Negative Interest Rate," aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will continue expanding the monetary base until the year-on-year rate of increase in the observed CPI (all items less fresh food) exceeds 2 percent and stays above the target in a stable manner. The Bank will make policy adjustments as appropriate, taking account of developments in economc activity and prices as well as financial conditions, with a view to maintaining the momentum toward achieving the price stability target.


Wednesday September 20 2017
Japan Trade Balance Swings to Surplus in August
Ministry of Finance, Japan l Chusnul Ch Manan| chusnul@tradingeconomics.com

Japan's trade balance swung to a JPY 113.64 billion surplus in August of 2017 from JPY 34.62 billion deficit in the same month a year earlier and above market consensus of a surplus of JPY 93.9 billion. Exports rose 18.1 percent from a year earlier to JPY 6,278 billion while imports increased by 15.2 percent to JPY 6,164.4 billion.

In August, exports rose 18.1 percent from the previous year to JPY 6,278 billion and above expectations of a 14.7 percent gain. It was the ninth straight month of increase in outbound shipments and the fastest since November 2013, as all categories lifted. Sales of transport equipment grew by 13.9 percent, supported by motor vehicles (14.5 percent), parts of motor vehicles (18.1 percent), and motorcycles, autocycles (30.9 percent). Also, outbound shipments of machinery went up 18.5 percent, mainly boosted by power generating machine (19.7 percent), computers and units  (18.6 percent), and parts of computers (19 percent). Sales of manufactured goods increased by 11.7 percent, led by iron and steel products (13.8 percent). In addition, exports of electrical machinery rose 16.9 percent, mainly driven by semiconductors (19.1 percent) and IC (23.5 percent). Sales of chemicals went up 20 percent, boosted by organic chemicals (24.8 percent), medical products (17 percent), and plastic materials (15.7 percent). Exports of others rose 26.3 percent, driven by scientific, optical instruments (29.4 percent). In addition, outbound shipments of foodstuff rose 18.1 percent and those of raw materials gained 33.1 percent.
 
Among major trading partners, exports rose to China (19.9 percent); the US (21.8 percent); the EU (13.7 percent), of which Germany (13.3 percent); Hong Kong (25.8 percent), and South Korea (17.1 percent).
 
Imports increased by 15.2 percent from a year earlier to JPY 6,164.4 billion, and above market expectations of a 11.8 percent gain. Purchases rose for all categories: mineral fuels (24.2 percent), of which petroleum (14.3 percent); electrical machinery (10.7 percent); chemicals (6.3 percent); machinery (23.8 percent); others (6.9 percent), of which scientific, optical instrument (12.2 percent); foodstuff (17.6 percent); manufactured goods (15.9 percent), raw materials (25.5 percent), and tansport equipment (8 percent), boosted by motor vehicles (17,9 percent) and parts of motor vehicles (19.8 percent).
 
Among major trading partners, imports rose from China (11 percent); the US (5.7 percent); Taiwan (4.2 percent); South Korea (16.7 percent); the EU (12.3 percent), of which Germany (23.8 percent), and Australia (51.8 percent).