In non-seasonally adjusted terms, Japan’s exports slumped -26.2% yoy to JPY 4.86T in June. Imports dropped -14.4% yoy to JPY 5.13T. Trade deficit came in at JPY -269B. In seasonally adjusted terms, exports rose 1.4% mom in June while exports dropped -1.8% mom. Trade deficit narrowed to JPY -424B from May’s JPY 585B.
Looking at some details, exports to US dropped -46.6% yoy. Exports to EU dropped -28.4% yoy. Exports to China, though, was largely unchanged and dropped only -0.2% yoy.
The set of data suggests that exports would remain weak in Q3, as coronavirus pandemic carries on. Weak external demand could drag the Japanese economy into a more prolonged and deeper recession. BoJ Governor Haruhiko Kuroda said last week that the economic would continue to improve gradually in H2. But as he said, risks are clearly skewed to the downside for the export-led economy.
