— Japan May Trade Deficit Y853.7 Bln Vs Surplus A Year Ago
— Japan May Trade Balance Posts 2nd Straight Monthly Deficit
— Japan May Trade MNI Median Forecast: Y711.1 Bln Deficit
— Japan May Exports -10.3% Y/Y, 3rd Y/Y Drop in Row
— Japan May Imports +12.3% Y/Y, Up 17 Months in Row
— Japan May Exports To US -14.6% Y/Y, 3rd Y/Y Fall in Row
— Japan May Exports To EU -8.8% Y/Y, 2nd Y/Y Fall in Row
— Japan May Exports To Asia -8.7% Y/Y, 3rd Y/Y Fall in Row
— Japan May Exports To China -8.1% Y/Y, 2nd Y/Y/ Fall in Row

TOKYO (MNI) – Japan’s trade balance posted a deficit for a second
straight month in May, hit by continued drops in car and electronics
exports, while manufacturers are scrambling to restore quake-hit
production facilities and supply chains, data from the Ministry of
Finance showed on Monday.

But economists expect exports to rebound in coming months as a
production recovery from the March 11 earthquake disaster appears to be
making faster progress than previously estimated.

Japan logged a trade deficit of Y853.72 billion in May, compared
with a surplus of Y309.13 billion a year earlier and a revised shortfall
of Y464.84 billion in April.

The May deficit came in wider than the median forecast by
economists in a Market News International survey for a deficit of Y711.1
billion. It was the second largest on record after a deficit of Y967.9
billion marked in January 2009, according to the MOF.

Japanese exports dropped 10.3% in May from a year earlier to Y4.76
trillion, after falling a revised 12.4% in April, marking a third
straight month of a year-on-year decline.

The May drop was led by lower shipments of automobiles and
semiconductors, compared to year-earlier levels.

Auto exports slumped 38.9% y/y in May, with the pace of
decline decelerating from a revised -67.0% in April.

Shipments of semiconductors and other electronics parts fell 18.5%
in May from a year earlier, also slower than -19.0% in April.

Imports gained 12.3% in May to Y5.61 trillion, posting the 17th
consecutive y/y rise after rising 8.9% in April.

The continued rise in imports was led by higher prices of oil and
gas as well as increased demand for liquefied natural gas used for
thermal power generation in the wake of the nuclear radiation crisis in
Fukushima.

Exports to Asia, the largest market for Japanese goods, fell 8.7%
to Y2.76 trillion in May, a third straight y/y fall, following a -6.6%
in April.

Export to China slid 8.1% to Y938.2 billion in May, a second
straight y/y fall, following a -6.8% in April.

Exports to the U.S. fell 14.6% from a year earlier to Y645.3
billion in May, a third consecutive month of a year-on-year fall, but
the pace of decline decelerating from a 23.3% drop in April.

In addition, exports to the European Union slumped 8.8% to Y561.6
billion in May, posting a second straight y/y fall, following a fall of
10.7% in April.

Japanese manufacturers are trying to restore their battered
production facilities and supply chains.

Toyota Motor Corp, the world’s largest automaker, has said it will
start normalizing its production in stages, starting in June, on a
global basis, moving up its normalization plan originally slated for
July in Japan and in August overseas.

Renesas Electronics Corp, which makes automotive-use
micro-controllers, plans to gradually restore its chipmaking capacity.
Its Naka factory in Hitachinaka, Ibaraki Prefecture fabricates
microcontrollers and system chips, many of which are produced only at
that site.

As a result, the Bank of Japan said last week in its monthly
economic report for June that industrial production in the
July-September quarter is expected to show a clear gain from April-June
as supply-side constraints are easing.

The government has said the massive damage inflicted on Japan’s
northeastern Pacific coast is estimated at up to Y25 trillion ($309
billion), making it the costliest natural disaster in the country’s
post-war history.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4835 **

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