Summary:
- Japan’s overall exports for August tumbled 8.2% YoY while imports also suffered a meaningful decrease
- Shipments to China suffered their second-largest annual drop in the last three years, it was also the weakest result for August since 2016
- Japan to put in place a sales tax hike on October 1
The Japanese economy is highly dependent on exports, hence foreign trade data could be particularly important there. What we got earlier today cannot be treated as a positive sign, to say the least. Namely, Japanese exports for August tumbled 8.2% YoY and imports also dwindled by 12% YoY. Moreover, the numbers look yet gloomier when we take a look at exports to China as they slumped 12.1% YoY, the second-worst result in the last three years. In turn, when we focus on August alone it turns out that a 2.3% decline this year was the worst month since 2016, as evidenced by the chart below. Although the gloomy numbers for exports had been expected (the consensus had called for even a 10% YoY slump), it could raise some concerns in Japan as the country is priming itself to put in place a sales tax hike on October 1. As a result, we expect Japanese consumers to front-load their imports in September which should be well seen in both retail sales and imports data. Looking forward, the Japanese economic outlook will depend on the extent to how effective measures implemented by the Japanese authorities to handle adverse effects of the mentioned sales tax hike will be. Taking into consideration the cloudy outlook abroad, we reckon that one cannot rule out a recession in the fourth quarter.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Japan’s exports to China fell in August, registering its first decline for the month since 2016. Source: Bloomberg, XTB
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
