Japan Exports:

 https://mainichi.jp/english/articles/20210818/p2g/00m/0bu/020000c

Article:

TOKYO (Kyodo) -- Japan's exports grew 37.0 percent from a year earlier in July, keeping up their sharp rebound from the initial blow of the coronavirus pandemic amid a solid global economic recovery, government data showed Wednesday.

Rising for the fifth month in a row, exports totaled 7.36 trillion yen ($67 billion), lifted by robust shipments of cars and auto parts to the United States as well as semiconductors and chipmaking equipment to Asian nations including China, the Finance Ministry said in a preliminary report.

Ideas:

Export growth is always good and most likely will continue but not at the same pace, as maybe some of the exports are demand that was delayed due to the pandemic.

The global economic recovery will most likely continue except for a situation that seems to be growing related the semi conductor chip market.

But at the same time, even though many countries are increasing their vaccination rates, the virus variants seem to be growing which potentially could cause challenges for supply chains and shipping.

Article:

The year-on-year increase topped 30 percent for the fourth straight month, following a 48.6 percent expansion in June, partly in reaction to a 19.2 percent drop in July last year when the pandemic dampened global demand for Japan-made products such as cars.

July's exports topped the pre-pandemic level two years ago, up 10.7 percent from 6.64 trillion yen in July 2019.

Imports soared 28.5 percent to 6.92 trillion yen, up for the sixth consecutive month, on rising prices for crude oil imports from the United Arab Emirates and other countries along with brisk purchase of iron ore mainly from Australia.

Ideas:

Yes, because the drop in the spring and summer of 2020 was large, it makes it look like the increase in 2021 as something significant. But in reality most likely its just a normal delayed demand from a year earlier.

So there was the delayed demand and the normal demand for July 2021 and that would obviously top the pre-pandemic level. Again just normal activity plus delayed activity.

The idea that imports increased needs to be taken with a grain of salt, meaning it might not be what it seems. For example are the imports based in import prices or are they based on import volume. 

As it looks, the increase in imports is based on changes in import prices and oil prices are very volatile meaning the go up and down easily on the global oil markets and or depending on supply and demand in the oil market.

So if the OPEC oil suppliers had reduced their supplies it might cause prices in the global market to increase as as such Japanese importers have no choice but to pay higher prices for the oil they need.

And then the iron ore prices could be in a similar situation and or dependent on supply costs and or shipping costs due to the pandemic.

But for the iron ore it could nothing more than an increase in demand from Japanese companies that need to ore to make different products and as such more ore was imported in July than the previous months.

Article:

The goods trade surplus stood at 441.02 billion yen, ensuring black ink for the second successive month and turning positive from the previous year's 14.76 billion yen deficit.

All figures were compiled on a customs-cleared basis.

The strong recovery in exports has helped the Japanese economy emerge from its record annualized contraction of a real 28.2 percent in the April-June period last year from the previous quarter triggered by the pandemic.

In the April-June period this year, the economy grew an annualized real 1.3 percent from the previous quarter for the first growth in two quarters, the Cabinet Office said Monday.

Ideas:

Its always good when the there is a merchandise good trade surplus as that means more money going into the Japanese current account that is going out due to imports.

Of course it also means global demand for Japanese merchandise exports are strong, which is good for Japanese manufacturers.

It also needs to be remembered, what while exports are important for the Japanese economy, they are not the entire economy. Exports only make up about 20 percent of Japan's GPD, while consumer spending makes up about 50 percent of Japan's GPD.

So while 20 percent might not be that much it is a large amount, but at the same time, exports alone can't grow the economy or carry the economy while consumer spending is not where it should be.

The Japanese economy needs all parts functioning at their potential. That means exports, consumer spending, business spending/investment and so on.

Have a nice day and be safe!