Export volumes should fall this year

The export climate index fell to a three-year low in January and suggests that exports will barely grow at all this year. The monthly trade data have been even more downbeat as they showed export volumes falling at an annual rate of nearly 6% over the last three months. Those figures tend to overstate the weakness in trade. Even so, we expect GDP growth in Japan’s main trading partners to slow to 2.8% this year, the weakest pace of expansion since the global financial crisis. The upshot is that we now expect export volumes to fall by 0.8% this year.