Japan Reported Trade Surplus in July

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In July, Japanese exports surged, which was the eighth straight monthly gain in exports, leading to a trade surplus in July.

According to the data of Ministry of Finance, total exports rose 13.4% in July from a year earlier. Exports to China increased 17.6% from a year earlier. Exports to the United States increased 11.5% in July, which is the sixth straight monthly gain.

As for imports, total imports increased 16.3% in July compared to the data in the same period last year, which was roughly in line with the estimates of increasing 17%. Imports in July rose 15.5% compared with that in June.

Japan reported a trade surplus of Y418.8 billion, which decreased 17% from that of the same period last year. The number beats previous estimates of Y380.0 billion surplus. In addition, the trade surplus with the United States in July was up 9.1% to Y647 billion.

“Exports aren't particularly strong in volume terms but will gradually recover ahead. The import figures, on the other hand, underscore the strength of domestic demand,” said Takeshi Minami, the chief economist at Norinchukin Research Institute.

“I expect external demand to rebound in the third quarter because you don’t see any region with fundamental weakness when you look at the global picture,” said Hiroaki Muto, the chief economist at Tokai Tokyo Research Center.

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