Japan Exports:

 https://mainichi.jp/english/articles/20210916/p2g/00m/0bu/024000c

Article:

TOKYO (Kyodo) -- Japan's goods exports expanded 26.2 percent in August from a year earlier, maintaining a rapid pace of recovery from last year's initial impact of the coronavirus pandemic, government data showed Thursday.

Exports increased for the sixth straight month to 6.61 trillion yen ($60 billion), led by brisk shipments of steel to the European market and semiconductor-producing equipment to Asian nations except China, the Finance Ministry said in a preliminary report.

The year-on-year growth in exports exceeded 20 percent for the fifth consecutive month, rebounding from a 14.8 percent plunge in August last year when Japan continued to suffer from dwindling global demand for items such as cars caused by the pandemic.

Ideas:

Its good that exports have rebounded and most likely will continue to increase but probably not at the same pace.

As it must be remembered the increases are being measured against last years losses. Going from a minus to a plus is always good but the real trick is are the increases over time sustainable and at what level with the current chip shortage and supply chain challenges.

It was also be remembered that while exports are good they in themselves unable to sustain an economy. It is estimated that exports in Japan only make up about 20% of Japan's GPD.

That is still a good amount but exports alone can't grow the economy, which means manufacturing, while very important part of the economy is not the entire economy and can't be relied on only to move the economy out of the pandemic situation.

Article:

Reflecting robust demand, exports were up 7.6 percent from August two years ago before the virus outbreak, the ministry said.

Meanwhile, automobile exports rose 4.0 percent in the reporting month, much slower than the 43.5 percent jump in the previous month, possibly reflecting a cutback in output by some domestic automakers due to a global chip shortage and the impact on parts suppliers in Southeast Asia of the spread of coronavirus, a ministry official said.

Imports surged 44.7 percent to 7.24 trillion yen for the seventh straight monthly increase on higher prices of crude oil imports from nations such as Saudi Arabia as well as rises in medicine and liquefied natural gas purchases.

Ideas:

Yes, most likely a definite cutback in output because of the global chip shortage and there is still supply chain challenges even though its not talked about that much now.

One car maker in the EU when talking to the BBC said the global chip shortage might last two years.

But that doesn't mean all areas of the car industry are going to have challenges over the next two years.

And companies expand their suppliers and as suppliers expand their supplies, most likely the car industry and the related suppliers will have figured out how to overcome the chip shortage and supply chains challenges long before that.

The increase in imports most likely had something to do with improved supply chains but it was must be remembered that when talking about increases in imports or exports is it the total volume or the total value?

In this case it seems, with the increase in prices in crude oil imports its the value of the imports and not exactly the total volume. Crude oil prices, at times, are very volatile meaning they can change up or down very quickly and suppliers and ultimately others in the supply chain are subject to changes in prices out of their control.

Article: 

As a result, the country logged the first goods trade deficit in three months, standing at 635.36 billion yen.

By region, Japan's exports to the United States grew 22.8 percent to 1.15 trillion yen and imports surged 33.5 percent to 757.49 billion yen. But car exports fell 12.4 percent, the first decline since February.

Shipments to China increased 12.6 percent to 1.42 trillion yen, and imports climbed 23.2 percent to 1.63 trillion yen. In contrast to other Asian destinations, chip-making machine exports to Japan's largest trade partner were down 10.1 percent.

Ideas:

Just looking at exports and imports a trade deficit usually means the value of imports was greater than the value of exports, which then means the current account has decreased as importers have to send money to their suppliers overseas while exporters receive money from overseas which increases the current account, which is like a economies bank account.

Most likely again, taking away the volatility of crude oil prices, the supply chain challenges caused by the pandemic and a surge in demand Japan for foreign products might have attributed to the increase in imports.

For car exports it could be a combination of two factors; one being demand has begun to slow ever slow slightly as customer/consumers who had waited to buy later because of the pandemic have now bought their new cars and of course the global chip shortage might have had an effect on exports.

A decline in chip-making machines, at this time, might mean nothing more than the companies that use the machines don't have enough chip supplies and as such don't need any new machines at this time.

Article:

Exports to Asia as a whole increased 26.1 percent to 3.88 trillion yen and imports soared 30.4 percent to 3.37 trillion yen.

As for the European Union, exports soared 29.9 percent to 618.77 billion yen, while imports jumped 54.5 percent to 862.61 billion yen.

"The growth in exports has been getting slower recently," said Kazuma Kishikawa, an economist at the Daiwa Institute of Research. He added that prices of exported items per unit have increased due to higher resource prices, outweighing a decrease in exports of some goods on a volume basis.

Ideas:

As all countries increase their vaccination rates more and more consumers maybe are beginning to get their appetite back for spending and also the continued improvement in supply chains over time.

As demand increased in all countries no doubt Japanese exports will continue to grow but maybe not at the same level.

But also there is the idea that the increase in resource prices, which most likely are or will be passed on along the supply chain can influence the total value of exports.

So yes are exports reported on a volume basis or are they reported on a value basis. As there is a big difference.

But the overall value of exports, while are important to know, the volume of exports is still the most important as volume for example might be one car or a million cars.

Yes value is important but exporters are looking for volume, for the most part, over total value.

Article:

For example, car exports in volume terms inched down 1.1 percent from a year ago, compared to a 4.0 percent rise in value terms.

But Kishikawa said overseas consumers' demand for cars itself remains solid, citing that Japan's exports of auto parts to the world grew 28.7 percent.

Looking forward, Kishikawa warned that the Chinese government's recent move to tighten its grip on the real estate investment market could dampen its domestic demand for goods used for infrastructure building such as steel, possibly hitting Japan's exports.

All figures were compiled on a customs-cleared basis.

Ideas:

The value of exports is important but exporters, such as car exporters want volume, they want to export as many cars as they can.

Price are important especially of course if whomever has an elastic/inelastic mindset meaning if the price begins to get too high for them they might think twice about buying a car.

But of course that is where the car suppliers begin to maybe add their incentives, whatever they might be, to help the buyer make up their mind to buy the car.

Japan's auto parts manufactures most likely will continue to see solid growth as auto parts are not just for new cars even more for cars and need some parts replaced so suppliers everywhere in the world need new parts to meet the demand for parts in cars bought last year or the year before.

The real estate market in China is a developing problem and hopefully will not turn into a global financial crisis.

But not doubt Japanese exporters might be challenged if the demand for new infrastructure decreases because the Evergrande and other companies problems in the future.

Have a nice day and be safe!