Japan's trade deficit likely widened in May despite higher export growth

Japan will release May trade data on 17 June. Exports are likely to have remained strong, increasing 10% y/y, partly due to favourable base effects. Strong growth in exports to the US likely helped. 

Exports in volume terms have picked up since the start of this year. Imports likely remained sluggish in May. Imports declined 8.4% y/y for the first 20 days of the month and 1.5% y/y for the whole month. 

Standard Chartered notes:

• We expect energy import prices to have continued their decline, dragging down imports in value terms. The trade balance likely widened to JPY 258.8bn, from JPY 53.4bn in April. 
  
  
• We continue to expect the annual trade surplus to narrow in 2015 on improving exports and lower energy imports