Monday February 20 2017
Japan January Trade Deficit At 2-Year High
Ministry of Finance l Joana Taborda | joana.taborda@tradingeconomics.com

The trade gap in Japan widened 67.8 percent year-on-year to JPY 1086.9 billion in January of 2017, above market expectations of a JPY 637 billion deficit and reaching the highest shortfall in two years. Exports rose less than expected as sales to China slowed due to the Lunar New Year holidays and those to the US declined. In addition, imports recorded the first annual rise in 27 months mainly due to oil and coal.

Exports increased 1.3 percent year-on-year to JPY 5421.9 billion, following a 5.4 percent jump in December and compared to expectations of a 4.7 percent rise. Sales of machinery jumped 5.2 percent; mineral fuels went up 52.3 percent; other products increased 5.1 percent, namely scientific and optical instruments (3.5 percent); parts of motor vehicles rose 12.5 percent; IC went up 8.4 percent and iron ore and steel products gained 8.1 percent. In contrast, sales of motor vehicles made the largest downward contribution and contracted 6.7 percent. Shipments to China increased 3.1 percent (12.5 percent in December) and those to the US shrank 6.6 percent (+1.3 percent in December).
 
Imports surged 8.5 percent to JPY 6508.8 billion, following a 2.6 percent fall in December and higher than market expectations of a 4.7 percent gain. It is the highest value in 16 months. Purchases of mineral fuels went up 26 percent, mainly due to petroleum (35.6 percent) and coal (52.2 percent). Imports also increased for others (7.5 percent), machinery (9.8 percent) and electrical machinery (5.3 percent). Imports from China increased 7.2 percent (-5 percent in December) and those from the US jumped 11.9 percent (+9.6 percent in December) while those from Western Europe shrank 4.8 percent (-3 percent in December).




Monday February 13 2017
Japan Q4 GDP Growth Below Expectations
Cabinet Office | Yekaterina Guchshina | yekaterina@tradingeconomics.com

The Japanese economy advanced 0.2 percent on quarter in the fourth quarter of 2016, following 0.3 percent growth in the previous period and below market expectations of a 0.3 percent expansion, according to preliminary estimates. It was the fourth consecutive quarter of growth, boosted by exports, government spending and private non-residential investment while household consumption was flat.

Compared with the third quarter of the year, external demand added 0.2 percentage points to growth, as exports of goods and services expanded 2.6 percent (2.1 percent in Q3) while imports advanced for the first time in a year by 1.3 percent (-0.2 percent in Q3).
Non-residential investments rebounded (0.9 percent from -0.3 percent in Q3),  adding 0.1 percentage points to growth. In contrast, private residential investment contracted 0.1 percent (2.4 percent in Q3). Private consumption was flat, following 0.3 percent growth in the previous period, making no contribution to growth.

Government consumption grew 0.4 percent (0.3 percent in Q3), while public investments fell 1.8 percent (-0.7 percent in Q3), making no contribution to growth.

On an annualised basis, Japan's economy grew 1 percent in the fourth quarter of 2016, following an upwardly revised 1.4 percent expansion in the previous period and below market expectations of 1.1 percent growth. It was the fourth straight quarter of expansion, led by external demand.




Tuesday January 31 2017
BoJ Holds Monetary Policy Steady, Raises GDP Forecast
Bank of Japan l Rida Husna | rida@tradingeconomics.com

The Bank of Japan left the interest rate unchanged at -0.1 percent at its January 2017 meeting, as widely expected. Policymakers also decided to maintain its 10-years government bond yield target around zero percent but said they raised their economic growth forecast to 1.5 percent for 2017 fiscal year from an earlier projection of a 1.3 percent growth.

The Policy Board also decided unanimously to extend by a year the deadline for its loan programmes aimed at boosting lending to industries with growth potential. 

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 7-2 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 bank's forecasts, it said the higher projections of the GDP mainly reflects improvement in overseas economies and the yen's depreciation. At the same time, the bank kept its projection for core consumer inflation at 1.5 percent for 2017 fiscal year, which starts in April.

Excerpts from the Outlook for Economic Activity and Prices:

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. Business fixed investment  is likely to maintain its moderate increasing trend, supported by accommodative financial consitions, heightened growth expectations and increases in Olympic Games-related demand. Private consumption is expected to continue increasing moderately as employee income continues to improve. Public investment is projected to increase through fiscal 2017, due mainly to the positive effects resulting from a set of stimulus measures and thereafter remain at a relatively high level with Olympic-Games related demand. Exports are expected to follow a 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 increase from about 0 percent and become slighty positive, reflecting developments in energy prices. Thereafter, it is expected to increase toward 2 percent as the output gap improves and medium-to long-term inflation expectations rise. The timing of the year-on-year rate of change in the CPI reaching around 2 percent will likely be at around fiscal 2018.

For fiscal year 2018, the economy is expected to expand by 1.1 percent, faster than a previous projection of a 0.9 percent growth. Core consumer inflation for the year is projected to stand at 1.7 percent, unchanged from an earlier forecast. 




Monday January 30 2017
Japan Jobless Rate Steady At 3.1% In December
Yekaterina Guchshina | yekaterina@tradingeconomics.com

The seasonally adjusted jobless rate in Japan was unchanged at 3.1 percent in December of 2016 compared to the previous month and in line with market expectations. The jobs-to-applicants ratio increased to 1.43 percent from 1.41 percent, hitting a new high since July 1991 and above market estimates of 1.42 percent.

Compared to the previous month, there were 2.09 million unemployed persons, higher than 2.05 November; employment rose by 31 thousand to 64.75 million and labour force also went up by 34 thousand to 66.85 million. Those detached from the labour force fell by 35 thousand to 43.84 million.

Among people aged 15 to 24 years old, the jobless rate rose to 4.9 percent from 4.3 percent.

A year earlier, unemployment was higher at 3.3 percent.




Friday January 27 2017
Japan Inflation Rate Slows Less Than Expected
Statistics Japan l Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Japan increased 0.3 percent year-on-year in December of 2016, easing from a 0.5 percent rise in November but above market expectations of 0.2 percent. Prices rose less for food and continued to fall for housing, utilities and transport. The core index which excludes fresh food edged down 0.2 percent, the least in ten months.

Year-on-year, prices increased less for food (2.5 percent compared to 3.6 percent in November), namely fresh food (13.8 percent from 21.6 percent); fresh fish and seafood (4.4 percent from 5.8 percent); vegetables (15.3 percent from 24.4 percent) and fruits (8.8 percent from 11.9 percent). Inflation also eased for clothing and footwear (0.6 percent from 1 percent); medical care (0.8 percent from 0.9 percent) and culture and recreation (0.5 percent from 0.8 percent).
 
In addition, prices continued to fall for housing (-0.2 percent, the same as in November); fuel, light and water charges (-4.8 percent from -5.8 percent) and transport and communication (-0.7 percent from -1.5 percent).
 
On a monthly basis, consumer prices declined 0.2 percent after being flat in November.
 
In Tokyo, consumer prices edged up 0.1 percent in January after being unchanged in December and better than expectations of a flat reading. Core consumer prices, which exclude fresh food, declined 0.3 percent from a year earlier, following a 0.6 percent drop in December and compared to market estimates of 0.4 percent fall. 




Wednesday January 25 2017
Japan Trade Surplus Rises Sharply On Exports
Ministry of Finance l Joana Taborda | joana.taborda@tradingeconomics.com

The trade surplus in Japan widened 361.6 percent year-on-year to JPY 641.4 billion in December of 2016, beating market expectations of a JPY 270 billion surplus. Exports jumped 5.4 percent, the first annual rise in fifteen months amid improving global demand and a surge in sales to China while imports slumped at a faster-than-expected 2.6 percent.

Exports increased to JPY 6679 billion, boosted by sales of machinery (+8.9 percent), namely power generating machines (+6.5 percent); electrical machinery (+9.2 percent), namely semiconductors (+14.9 percent), IC (+22.5 percent), electrical apparatus (+17.9 percent) and electrical power machinery (+15.3 percent); and others (+11.7 percent) including scientific and optical instruments (+2.7 percent). Sales to China went up 12.5 percent to a record high and those to the United States increased 1.3 percent.
 
Imports declined to JPY 6037.6 billion, mainly due to lower purchases of LNG (-25.5 percent), chemicals (-8.1 percent) and others (-11.2 percent), namely clothing and accessories (-10.8 percent). Imports from China declined 5 percent and those from the Western Europe fell 3 percent while purchases from the United States rose 9.6 percent. 

Considering full 2016, exports went down 7.4 percent, the first decline since 2012 and imports shrank 15.9 percent. The trade balance swung to a JPY 4074 billion surplus from a JPY 2791 billion deficit in 2015. 


Tuesday December 27 2016
Japan Unemployment Rate Up To 3.1% In November
Statistics Japan l Yekaterina Guchshina | yekaterina@tradingeconomics.com

The seasonally adjusted jobless rate in Japan rose to 3.1 percent in November of 2016, from 3 percent in the previous month and above market expectations of 3 percent. The jobs-to-applicants ratio increased to 1.41 percent from 1.4 percent, hitting a new high since July 1991.

Compared to the previous month, there were 2.05 million unemployed persons, higher than 1.97 October; employment declined by 110 thousand to 64.44 million and labour force also fell by 3 thousand to 66.51 million. Those detached from the labour force remained mostly unchanged at 44 million.

Among people aged 15 to 24 years old, the jobless rate fell to 4.3 percent from 5.1 percent.

A year earlier, unemployment was higher at 3.3 percent.


Monday December 26 2016
Japan Inflation Rate At 1-1/2-Year High Of 0.5%
Statistics Japan l Yekaterina Guchshina | yekaterina@tradingeconomics.com

Consumer prices in Japan increased 0.5 percent year-on-year in November of 2016, following 0.1 percent growth in the previous month. It is the highest inflation rate since May 2015, boosted by higher fresh food prices. However, core consumer prices which exclude fresh food went down 0.4 percent, the ninth straight month of annual declines and worse than market expectations of 0.3 percent drop.

Year-on-year, food prices went up 3.6 percent, following a 2.3 percent increase in October. It is the biggest rise since March 2015, boosted by an 21.6 percent jump in fresh food cost, namely a 37.3 percent rise in fresh vegetables and a 12.7 percent increase in fresh fruit. Inflation eased for recreation and culture (0.8 percent compared to 1 percent in October); medical care (0.9 percent from 1 percent) and clothing and footwear (1 percent from 1.2 percent in October).

In addition, prices declined at a slower pace for fuel, light and water charges (-5.8 percent compared to -6 percent in October) and transportation and communication (-1.5 percent compared to -1.7 percent in October) but fell at the same pace for housing (-0.2 percent).

On a monthly basis, consumer prices were flat, following a 0.6 percent gain in October. 

In Tokyo, consumer prices remained unchanged, following a 0.5 percent gain in November. Core consumer prices, which exclude fresh food, declined 0.6 percent from a year earlier, following a 0.4 percent drop in a month earlier and worse than market estimates of 0.4 percent drop. 


Tuesday December 20 2016
BoJ Leaves Monetary Policy Unchanged
Bank of Japan l Rida Husna | rida@tradingeconomics.com

The Bank of Japan left the interest rate unchanged at -0.1 percent at its December 2016 meeting, as widely expected. Policymakers also decided to maintain its 10-years government bond yield target around zero percent and viewed a moderate recovery trend in the economy had continued while exports had picked up.

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 Policy Board also decided by a 7-2 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.  

Excerpts from the Statement by the Bank of Japan:

Japan's economy has continued its moderate recovery trend. Overseas economies have continued to grow at moderate pace, although emerging economies remain sluggish in part. In this situation, exports have picked up. On the domestic demand side, business fixed investment has been on a moderate increasing trend as corporate profits have been at high levels and business sentiment has improved somewhat. Against the background of steady improvement in the employment and income situation, private consumption has been resilient and housing investment has resumed its pick-up. In the meantime, public investment has been more or less flat. Reflecting these  moderate increases in demand both at home and abroad and the progress in inventory adjustments, industrial production has picked up. 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) has been slightly negative. 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 follow a 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 be slightly negative or about 0 percent for the time being, due to the effects of the decline in energy prices, and as the output gap improves and medium-to long-term inflation expectations rise, it is expected to increase toward 2 percent.

Risks to the outlook include the following: developments in the US economy and the impact of its monetary policy on global financial markets; the consequences stemming from the United Kingdom's vote to leave 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.


Monday December 19 2016
Japan Trade Balance Swings to Surplus In November
Yekaterina Guchshina | yekaterina@tradingeconomics.com

Japan recorded a JPY 153 billion trade surplus in November of 2016, compared to JPY 387 billion deficit a year earlier but lower than market expectations of JPY 227.4 billion surplus. Exports declined 0.4 percent year-on-year, 14th consecutive drop but less than expectations of an 2 percent fall. Imports shrank 8.8 percent compared to forecasts of a 12.6 percent decrease.

Exports decreased to JPY 5956.5 billion. Sales went down mainly to Thailand (-9.5 percent); Philippines (-6.9 percent); Taiwan (-1.2 percent); India (-1.2 percent); the United States (-1.8 percent). In contrast, exports rose to China (+4.4 percent); South Korea (+11.9 percent); Singapore (-2.8 percent) and Malaysia (+5.9 percent). By product, declines were reported for transport equipment (-4.6 percent), namely cars (-7.4 percent); and manufactured goods (-6.4 percent), namely iron and steel products (-12.1 percent).

Imports went down to JPY 5804 billion. Purchases from China shrank 9.9 percent and those from the United States fell 5.1 percent. By product, mineral fuels accounted the most for the decline (-14.4 percent), namely petroleum (-14.4 percent). Also, imports fell for chemicals (-13.1 percent); manufactured goods (-8.7 percent) and electrical machinery (-9.1 percent).