Japan’s trade balance likely to have improved in July

Japan’s trade balance is expected to have improved in July. According to a Societe Generale research report, the trade balance is likely to have come in at JPY 52.5 billion, a marked improvement from the deficit of JPY 261.4 billion seen in July 2015.

Japan’s trade balance, on a seasonally-adjusted basis, is expected to have come in at a surplus of JPY 3 billion for nine consecutive months.

On a year-on-year basis, exports are expected to have fallen by 12.2 percent year-on-year, probably reflecting a temporary reactionary impact from the firmer than anticipated exports in June, added Societe Generale. Also, corporates have cut down production and exports following the Brexit vote at the end of June and early July in anticipation of solid market turmoil after the vote. This has possibly contributed to weak exports.

“While the export trend has likely bottomed out, we do not foresee a strong momentum in exports recovering yet,” stated Societe Generale.