According to the Zhituo Finance APP, Japan's exports in October exceeded expectations, highlighting that despite increasing uncertainty in overseas markets, demand for Japanese products remains strong in china and other asian countries.

According to data from Japan's Ministry of Finance released on Wednesday, Japan's exports in October increased by 3.1% compared to the same period last year, significantly exceeding economists' general expectations of 1.5% to 2%, driven by strong growth in the shipment of chip manufacturing equipment, particularly to china. Exports to the usa's medical supplies also played an important supportive role. After a decline in exports in September, which was the first in 10 months, Japan's exports unexpectedly rebounded.

Japan's imports in October increased by 0.4% year-on-year, in contrast to economists' previous predictions of a possible decline of 1.9%. The trade deficit widened from 294.1 billion yen to 461.2 billion yen (approximately 2.98 billion USD).

Better-than-expected export growth will ignite hope in the Japanese market that the economy can maintain a positive recovery momentum and is expected to continue providing strong support from the vital export data for the Japanese economy. Although Japan's GDP showed positive growth for two consecutive quarters in the quarter ending in September, the growth rate slowed due to net exports dragging down overall performance.

According to Hiroshi Miyazaki, a senior researcher at Itochu Research Institute: "Today's data gives hope for a recovery in external demand in the fourth quarter from October to December. The Chinese government's stimulus measures have begun to show positive effects."

Detailed data shows that after an unexpected sharp decline of 7.3% in exports to China in September, there was a year-on-year growth of up to 1.5% in October, with Japan's overall exports of chip manufacturing equipment increasing significantly by one-third. More importantly, the strongest export data to China indicates that the large-scale stimulus measures taken by the government in this global second-largest economy are starting to achieve results in certain areas, boosting overall consumer spending.

Japan is a global leader in chip manufacturing equipment and the chip raw material supply chain, accounting for 60% of the global chip manufacturing raw materials market and about 30% of the chip manufacturing equipment market. Tokyo Electron, a chip equipment giant from Japan, holds a very high market share in the fields of coater and developer, and is the strongest competitor to USA chip equipment leader applied materials in areas like ALD, CVD, PVD, RTP, CMP, etching, and ion implantation equipment.

Although the yen's exchange rate has risen from extreme weak levels compared to the same period last year, Japan's exports still increased in October. Japan's Ministry of Economy, Trade and Industry indicated that the average exchange rate of the dollar to yen last month was 145.87, meaning an appreciation of about 2% compared to the same period last year.

However, amid the latest export data showing unexpected growth, officials from the japanese government are expressing concerns about the global business outlook as Donald Trump prepares for a return to the white house. If Trump follows through on his promise to raise tariffs, imposing comprehensive tariffs on 60% of imports from china and 20% of imports from other parts of the world, global business leaders are bracing for the extreme negative impact stemming from a rise in trade protectionism in the usa.

It is worth noting that demand in some key global regions has begun to slow, which may indicate that global demand has not fully entered the recovery curve. In October, japan's exports to the usa fell by 6.2%, while exports to europe declined by 11.3%, both showing a continuous decrease.

The Bank of Japan is closely monitoring the trend of external demand, which is extremely important for japan's economic growth, as well as the domestic price and wage growth, to determine the timing of the next interest rate hike. The positive effects brought about by sustained strong exports may continue to provide powerful positive catalysts for japanese prices, wages, and even the overall economy.

Bank of Japan Governor Kazuo Ueda stated in a speech on Monday that, despite the increasing likelihood of a soft landing for the usa economy by the federal reserve, the Bank of Japan still needs to cautiously assess various risks, including the usa economy, and their potential policy implications. When asked about the impact that Trump’s return to the white house might have, Ueda noted that the economic policies introduced by the Trump administration would take a long time to clarify.

On Monday, Bank of Japan Governor Kazuo Ueda, in an important speech closely watched by global investors, avoided mentioning any sensitive wording regarding a rate hike in December or when rates might rise in the future, emphasizing the use of some economic data as the basis for rate hikes. Ueda told local business leaders in Nagoya, central japan: "The actual timing of policy adjustments will continue to depend on the developments in economic activity and prices, as well as future financial conditions."

However, Ueda pointed out that the Bank of Japan is continuing to move in the direction of raising interest rates and is maintaining its standard position on this issue. He reiterated his stance that if the Bank of Japan achieves its goals regarding global economic activities and the prospects for domestic economic and wage growth and price increases, the central bank will continue to raise policy rates.

One major concern for japan's export trade in the future is the promise of tariffs on commodities by president-elect Donald Trump. Research by the China Economic and Management Research Center at Stanford University shows that the precedent set by the u.s.-china trade war from 2018 to 2019 highlights the potential scale of future impacts, namely that for every 1% increase in export prices due to tariffs, profit margins for chinese exporters would decline by approximately 0.35 percentage points. With the new round of the u.s.-china trade war and potential new tariffs against japan, similar negative trade dynamics could offset the significant positive catalysts that the yen's depreciation brings to japanese large enterprises, eroding their profit growth.

"We are not yet at the stage where the tariff policies of the Trump administration are beginning to significantly affect export volumes or the behavior of exporters," said Hiroshi Miyazaki, a senior researcher at Itochu Corporation. "However, we still have a sense of uncertainty. We need to continue to pay attention to the policy stance of the incoming Trump administration, especially concerning tariffs."

Editor/ping