Korea-Japan trade deficit, US leading economic index slumping for 23 months, growth stagnating

Korea-Japan trade deficit, US leading economic index slumping for 23 months, growth stagnating

Korea's trade deficit fell into Japan's trade deficit as the yen exceeded 150 yen per dollar due to a sharp decline in trade with China, the United States, and Japan, and the U.S. leading economic index fell for 23 consecutive months, with zero growth forecasts for the second and third quarters.
From the 1st to the 20th, Korea's trade deficit plummeted from $30.7 billion in exports and $32 billion in imports to 19.2% ($7.58 billion) in imports, which is 2.5 times that of exports (7.8% ($2.61 billion)) compared to the same period last year. The trade balance recorded a deficit of $1.23 billion.
The annual cumulative trade deficit is a deficit of 900 million dollars. Japan's trade deficit in January was 1.7583 trillion yen, a 49.9% decrease from the record high deficit of 3.5064 trillion yen in the same month last year.
Japan's exports of products such as automobiles are strong, but the Ministry of Finance announced on the 21st that exports surged 11.9% to 7.3327 trillion yen, the highest in January since 1979.
The trade deficit decreased for the 10th consecutive month, with imports decreasing by 9.6% to 9.91 trillion yen.
Japan's decline in imports was led by a 22.5% drop in mineral oil imports, including crude oil, which accounts for a quarter of the total, due to a drop in resource prices due to Russia's war in Ukraine.
Korea's exports for the 20th day of this month increased by 39.1% in semiconductors and home appliances (6.6%) compared to the same period last year, while exports by petroleum products (6.4%), passenger cars (23.3%), steel products (6.8%), ships (16%), Automobile parts (16.5%) decreased.
The share of semiconductor exports in February was 17.2%, an increase of 5.8 percentage points.
The decline in Korea's exports came from most of its key trading partners, including China (12.8%), the United States (5.0%), the European Union (22.8%), Vietnam (12.2%), and Japan (4.4%), as well as Hong Kong (129.1%) and Malaysia (129.1%). Exports increased by 48.5%.
In addition to the increase in semiconductor manufacturing equipment (3.8%) compared to the same period last year, imports included crude oil (12.8%), semiconductors (0.5%), gas (55.3%), machinery (11.2%), petroleum products (27.1%), and coal (33.7%). Most major items decreased, including passenger cars (24.8%).
The decline in imports was significant in the trading centers of China (10.8%), the United States (22.8%), the European Union (18.4%), and Japan (18.7%), while imports from Vietnam (3.9%) and Taiwan (3.1%) increased.
The Enterprise Research Group Index (LEI), a measure of future economic activity in the United States, fell 0.4% to 102.7 in January, marking the 23rd consecutive month of decline and the lowest level since April 2020, during the economic downturn caused by the coronavirus pandemic shutdown.
Reuters reported that the Conference Board has abandoned its long-standing claim that the U.S. economy will fall into recession, but the index's 23 consecutive months of declines have brought it one month short of the record slump from April 2007 to March 2009 during the global financial crisis. It was reported on the 20th.
Justyna Zabinska-La Monica, senior manager at the Conference Board, said: “While the decline in the LEI continues to represent a headwind to economic activity, for the first time in the past two years, six out of ten LEI components have shown positive contributions and do not signal a recession ahead.” “However, the growth rate in the second and third quarters of this year will be close to zero,” he told Reuters.
The Conference Board first announced that the LEI index signaled a recession in July 2022.
The U.S. Federal Reserve repeated this prediction every month until the January report, and the U.S. economy's "recession" did not materialize as production, job creation, and consumer spending all exceeded expectations.
Reuters explained the difference from the forecast by saying, “The continued decline in the number of new applications for unemployment benefits and the decline in future credit availability, home building permits, and new orders for manufactured goods have led to changes in the recession outlook.”
The yen exchange rate rose to the upper 149 yen range per dollar on the 21st, as yen buying and dollar selling took precedence due to the decline in long-term interest rates in the U.S. and the narrowing interest rate gap between the U.S. and Japan.
On this day, the won-dollar exchange rate started at 1,334.4 won, down 3.2 won from the previous trading day, and is in the mid-1,330 won range.
In the New York bond market, bond purchases increased on the 20th due to the diagnosis that the U.S. economy was slowing down as the U.S. leading economic indicator index in January fell 0.4% from the previous month, which was larger than the market expectation of a 0.3% decline.