Deep Dive:trade-Exporting into stronger end markets

Event

The BOJ released their real export growth series, which deflates the MOFdata with the BOJ’s corporate goods price index (CGPI). Whilst volatilemonth-to-month, there is growing evidence that real GDP growth in the USand the EU is pulling Japan’s exports higher.

Outlook

Looking at the BOJ data above, Japan’s real export growth appears to havefaded through 2015, become negative at the start of 2016, before returning topositive growth, quite strong in YoY terms, over May, June and July.

A strong link to the global industrial recovery: Some investors, whilstunderstanding that most of Japan’s leading industrial companies are MNCsand that the Japanese stock market moves as a ‘global cyclical’, wish to see astrong linkage to the global industrial recovery story through positiveJapanese export volume growth.