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22 Apr 2014
Japan's trade deficit grows amid rush demand - Nomura
FXStreet (Bali) - According to Nomura Economists, Japan's trade deficit is expected to contract from April on fallback from rush demand and export recovery following yet another deficit record on Monday.
Key Quotes
"Seasonally adjusted trade deficit larger than consensus, exceeded ¥1trn for seventh straight month. According to MOF trade statistics, March nominal exports were +1.8% y-y, weaker than the consensus (Bloomberg survey median) forecast of +6.5%, while nominal imports were +18.1%, stronger than the consensus forecast of +16.2%."
"The trade deficit came in at ¥1,446.3bn on a nominal basis and at ¥1,714.2bn on a seasonally adjusted basis, both above consensus forecasts, of ¥1,080.9bn and ¥1,427.6bn, respectively. This marked the 37th consecutive month of seasonally adjusted trade deficit, and the seventh straight month in excess of ¥1trn, and reflected strong growth in nominal imports on increased demand in Japan ahead of the consumption tax hike."
"However, we expect the seasonally adjusted trade deficit to shrink markedly in April as import momentum slows in response to the disappearance of rush demand ahead of the consumption tax hike."
"Moreover, although the seasonally adjusted current account likely fell into deficit in Jan-Mar 2014 on a quarterly basis for the first time, we think it could well move back into surplus from Apr-Jun 2014 on improvement in the trade balance and growth in the income surplus."
Key Quotes
"Seasonally adjusted trade deficit larger than consensus, exceeded ¥1trn for seventh straight month. According to MOF trade statistics, March nominal exports were +1.8% y-y, weaker than the consensus (Bloomberg survey median) forecast of +6.5%, while nominal imports were +18.1%, stronger than the consensus forecast of +16.2%."
"The trade deficit came in at ¥1,446.3bn on a nominal basis and at ¥1,714.2bn on a seasonally adjusted basis, both above consensus forecasts, of ¥1,080.9bn and ¥1,427.6bn, respectively. This marked the 37th consecutive month of seasonally adjusted trade deficit, and the seventh straight month in excess of ¥1trn, and reflected strong growth in nominal imports on increased demand in Japan ahead of the consumption tax hike."
"However, we expect the seasonally adjusted trade deficit to shrink markedly in April as import momentum slows in response to the disappearance of rush demand ahead of the consumption tax hike."
"Moreover, although the seasonally adjusted current account likely fell into deficit in Jan-Mar 2014 on a quarterly basis for the first time, we think it could well move back into surplus from Apr-Jun 2014 on improvement in the trade balance and growth in the income surplus."