Japan: Consumer confidence upbeat but target missed

Источник:
ITTO's Tropical Timber Market Report
Просмотров:
5238
  • text size

The results of a survey of consumer confidence in Japan were released in mid April. The consumer confidence index rose to 44.5 in March, the highest level since February 2007 when it was 48.4. However, the government was expecting the index to climb to 46.0.

The March index was the third consecutive rise after the full 1.0 point rise in February this year. Analysts suggest that aggressive government and central bank policies fiscal are having the desired effect. The Japanese Cabinet Office upgraded its view on the consumer sentiment index saying it is showing signs of improvement. However it should be remembered that a reading below 50 suggests consumer pessimism.

The view of Japanese households of overall livelihood was unchanged for March with the relevant index unchanged at 42.9. Expectations for higher earnings were also unchanged from the previous month. However, Japanese consumers were slightly less pessimistic about the employment situation and the index for their intention to buy durable goods was better.

Any further exchange rate fall will be decided by institutional investors
On 17 April the yen fell to 99,72 to the US dollar, its lowest in almost four years. The steep drop in the value of the yen surprised markets and was driven by a debt buying spree by the Bank of Japan (BoJ). The BoJ began its debt buying on 8 April, purchasing almost US$16 billion in its first phase of its stimulus plan.

This move by the BoJ will ensure that borrowing costs remain low. The yen fell to new lows against major currencies in the first week of April almost testing the 100 yen to the US dollar mark. However, every fall in the value of the yen pushes up the cost of imported fuel and this poses a risk to domestic demand as almost all fuel is imported. Almost all nuclear reactors in Japan have been shut down for safety checks after the recent disaster and power generation depends entirely on imported fuel.

For a sustained weakening of the yen there would need to be decisive moves by Japanese institutional investors to start buying higher-yielding assets. Some hints that this has begun as the yield on some European bond yields have fallen.

Weak yen impacts Eurozone prompting calls for EU growth strategy
The Japanese yen had, by the end of this month, fallen by more than 20% against the euro and, while Japan accounts for just 4-5% of trade in the EU, cheaper exports from Japan are undermining the competitive position of EU car makers and heavy machinery makers amongst others.

To compete, EU manufacturers are faced with having to reduce market sales prices and some analysts are openly talking of a price war in the EU. In a market which is burdened by austerity policies lower priced imports such as those now available from Japan weaken domestic EU companies who are now calling for more growth friendly policies to combat EU deflation.

OECD lends support to Japan’s economic policies
Critics of „Abenomics‟, the term coined to describe Japan‟s bold economic policies, are trying to decide if this will aid global economic recovery or just create a shortterm boost to the economy. An OECD press release introducing the latest OECD Economic Survey of Japan provides the organization‟s view of prospects for the Japanese economy.

Overall, the OECD is supportive of the moves taken by the Japanese government and central bank but warns; “ Japan is poised for an economic expansion, but long-term growth prospects remain contingent on additional efforts to revitalise the economy and reduce unsustainable levels of public debt.”

The new Survey, presented in Tokyo by OECD Secretary-General Angel Gurría, forecasts the Japanese economy will grow by about 1.5% annually in 2013 and 2014. For the press release see: http://www.oecd.org/newsroom/japan-is-poised-forexpansion-but-must-curb-government-debt.htm

The press release says “Japan‟s gross public debt reached 220% of GDP in 2012, the highest level ever recorded in the OECD area, while the budget deficit is hovering around 10% of GDP. With the debt ratio moving further into uncharted territory, the report underlines the urgent need to restore fiscal sustainability.

The sustainability of public finances is a major concern but that the medium-term fiscal plan that the government has promised to present later this year should include spending cuts and tax increases large enough to bring the budget back into primary surplus by 2020 and stabilise the public debt ratio.”

A detailed and credible package is essential to maintain market confidence in Japan's fiscal situation, mitigating the risk of a run-up in long-term interest rates says the OECD.

Trade news from the Japan Lumber Reports (JLR)
The Japan Lumber Reports (JLR), a subscription trade journal published every two weeks in English, is generously allowing the ITTO Tropical Timber Market Report to extract and reproduce news on the Japanese
market.

The JLR requires that ITTO reproduces newsworthy text exactly as it appears in their publication. For the JLR report please see: http://www.nmokuzai.com/modules/general/index.php?id=7

Wood supply and demand statistics
The Ministry of Agriculture, Forestry and Fisheries announced wood demand and supply statistics of 2012. Total demand was 24,650 M cbms, 0.3% up. In wood supply, domestic wood was 18,470 M cbms, 1.0% up. Imported wood was 6,177 M cbms, 1.6% down so that share of domestic wood was 74.9%, 0.5 points up from 2011.

Wood demand in 2012 (log shipment volume to sawmills, plywood mills and chipping plants) was almost unchanged from 2011. Both sawmills and plywood mills‟ demand dropped some from 2011 but the volume for wood chip plants increased.

Housing starts were 882,797 units in 2012, 5.8% more than 2011 but plywood mills curtailed the production by over supply in 2011 with rush orders after the North East Japan Earthquake in March 2011, which reduced wood consumption in 2012.

Domestic logs for plywood use were 2,602 M cbms, all time high record. In imported wood, North America and New Zealand increased but import from Russia and South Sea Asia significantly decreased in 2012. Number of sawmills in 2012 was 5,927, 315 mills or 5% less than 2011. Number of sawmills in 2002 was 10,394 so it dropped by almost half in ten years.

Shipment of lumber in 2012 was 9,302 M cbms, 1.4% less than 2011 out of which kiln dried lumber was 2,744 M cbms, 4.3% more.

Tropical logs
Rainy season in Malaysia is almost over but Sarawak still has foul weather and log production remains low. Local plywood mills are aggressively buying logs to run the mills steadily. India has resumed log purchase again since last month. Thus, supply and demand of logs are badly imbalance so the log suppliers continue asking higher prices.

Sarawak meranti regular prices are $280 per cbm FOB or higher, more than $10 up from previous contract. Shipment for Japan is down to one shipment in two months after many South Sea log peeling plywood mills are gone. Log inventories are over three months now so that they procure minimum volume only. Meranti small prices are about $240, $10 up. Sabah kapur regular prices are firming at about $365.

China buys PNG logs actively so that log prices are climbing. For Japan market, callophylum prices are $290, $10 up. Mersawa is $280-290 and MLH is $185, $20 up. Log prices in Japan are firm due to weak yen. Meranti regular log prices are 8,800 yen per koku CIF, 500 yen up from March. Log prices will be higher in coming months by higher FOB and weak yen so plywood mills asked 20% price hike on plywood
since last February but the hike so far is only less than 10%.

Market for imported tropical plywood
The suppliers in the South East Asia continue asking higher export prices. In Malaysia, weather remains unstable yet and log production is low so that the log prices are gradually increasing. Plywood mills‟ production is inactive so that the order balances keep swelling up. With higher log cost and climbing labor cost, plywood mills are asking higher plywood prices.

Meantime, the yen is getting weaker so the largest exporting plywood mill closed up April delivery of JAS concrete forming 3x6 at 52,000 yen per cbm C&F and has started asking 55,000 yen now. The price was 40,000 yen in December last year so this is real steep hike.

In Japan, movement of imported plywood is momentarily resting so that sharp price increase is difficult. Therefore, importers are cautious to commit high priced future cargoes until higher prices are accepted in the market. The importers are restraining both purchase and sales now.

Actually they seem to wait until actual demand shows up and necessity comes up to procure future cargoes. They can tide over by adjusting the inventories for some time. By limited supply with higher export prices by the suppliers, the market prices in Japan are holding so it looks like confrontation by three parties, suppliers, importers and distributors continues for some time.

However, the inventories continue declining in Japan with reduced purchase since last February so there are some worries about shortage in the market in coming months. Current market prices in Tokyo on JAS concrete forming 3x6 panel are 1,080-1,100 yen per sheet delivered, 30-50 yen up from March.

Orders for major house builders in March
March orders were very brisk for major house builders as more people think this is time to buy. Factors are future hike of mortgage interest rate, recovery of stock market, coming raise of consumption tax and higher house prices in future by materials inflation by weakening yen. However, for house builders, works have been delayed by shortage of carpenters and craftsmen and some builders notify customers it would take time to complete.

Sekisui House had active orders in March. Orders for detached units increased by 7% compared to March last year. Rental units were up by 26% and units built for sale were up by 34% but condominiums and renovation business were down so overall house business was up by 10%.

Daiwa House had 4% more orders for detached unit, five consecutive months increase. Units built for sales were up by 49% so overall housing business including property trading was up by 16%.Condominium sales and renovation business were down by 9% and 5%. Sumitomo Forestry had 4% more orders for detached custom made units. Sales of environmentally friendly houses and units for rebuilding have been steady.

Misawa Home had 8% more orders on detached units in March, out of which custom made units were 7%, units built for sale were 18% and rental units were 14% up, making overall house business increase of 9%. Mitsui Home‟s custom made units increased by 25%. For the complete housing data see the Construction Research and Statistics Office Policy Bureau, Ministry of Land, Infrastructure, Transport and Tourism website at: http://www.mlit.go.jp/toukeijouhou/chojou/stat-e.htm

Japan’s furniture imports
January 2013 furniture imports
The source and value of Japan‟s office, kitchen and bedroom furniture imports for March 2013 are shown below. Also illustrated is the trend in imports of office furniture (HS 9403.30), kitchen furniture (HS 9403.40) and bedroom furniture (HS 9403.50) between 2009 and March 2013.

Office furniture imports (HS 9403.30)
In March 2013 three countries provided more than half of the total office furniture imports by Japan. The combined total of imports from the top three suppliers, China Poland and Italy in March amounted to
yen 133 bil. or 57% of total office furniture imports. Imports from China rose 35%, those from Poland fell 23% while imports from Italy jumped around 70%.

Office furniture imports (HS 9403.30)

  13-Feb Yen '000s 13-Mar Yen '000s
S. Korea 8900 4805
China 68133 92188
Taiwan P.o.C. 20672 5179
Thailand 1912 7193
Malaysia 13715 16644
Indonesia 10950 14150
Sweden - -
Denmark 2310 2042
UK 8903 2230
Belgium - -
France 1977 -
Germany 7872 11230
Switzerland - 346
Portugal 11265 16269
Italy 10272 17805
Poland 30263 23049
Austria 1357 1038
Lithuanian 1751 2338
Czech Rep. 474 -
Slovakia 3131 2023
USA 2700 7917
Mexico - 2659
total 206557 229105

Source: Minisy of Finance Japan

The other major suppliers were Malaysia and Indonesia which, together added a further 13% to the total trade in office furniture.

In March, Japan‟s total office furniture imports totaled yen 229 bil up 11% from February. It is interesting to note that Vietnam does not feature as a top 20 supplier of office furniture to Japan despite being a major supplier of kitchen and bedroom furniture to the Japanese market.

Kitchen furniture imports (HS 9403.40)
Kitchen furniture imports remain the second largest segment of all wooden furniture imports into Japan after bedroom furniture. Vietnam maintained its number one position as the supplier of kitchen furniture to Japan in March and the value of imports from Vietnam were largely unchanged from February at yen 400 bil.

The top five suppliers of kitchen furniture accounted for over 90% of all kitchen furniture imports. Vietnam supplied yen 400 bil. (unchanged in March), China yen 215 bil. (up 16%), Philippines yen 148 bil. (down 12%), Indonesia yen 147 bil. (down 34%) and Malaysia yen 56 bil. (up 6%). Total imports of kitchen furniture in March were yen 1,049.9 bil ., down from yen 1140.8 bil in February, an 8% decline.

The US and Canada feature as suppliers of kitchen furniture but in March both experienced a fall in Japanese imports. US sales were down 45% while Canadian sales to Japan were down around 37%.

Kitchen furniture imports (HS 9403.40)   

  Imports
13-Feb
Yen '000s
Impots
13-Mar
Yen '000s
China 179997 215610
Taiwan P.o.C. 829 0
Vietnam 391415 400303
Thailand 22583 26827
Malaysia 52651 55759
Philippines 168673 148867
Indonesia 225985 147644
Sweden 305 0
Denmark 0 470
UK 1193 1745
Belgium 0 0
Germany 43214 23597
Spain 593 0
Italy 19574 9984
Austria 0 1972
Lithuania 261 3565
Canada 8352 3193
USA 24893 10376
Argentina 367 0
total 1140885 1049912

Source: Minisy of Finance Japan

Bedroom furniture (HS 9403.50)
The value of Japan‟s bedroom furniture imports in March 2013 rose 18% from a month earlier, from Yen 1.6 bil. to Yen 1.9 bil. As in February this year the top suppliers were China and Vietnam which together accounted for around 75% of all wooden bedroom furniture imports to Japan. Imports from China during March increased 20% and imports from Vietnam increased around 8%. Other countries supplying over yen 40 mil. include Malaysia, Taiwan P.o.C, Thailand and Indonesia.

Bedroom furniture (HS 9403.50)

  Imports
13-Feb
Yen '000s
Impots
13-Mar
Yen '000s
S Korea 1600 -
China 841417 1011482
Taiwan P.o.C. 27177 40643
Vietnam 382555 410394
Thailand 59131 54782
Singapore 0 -
Malaysia 149431 220560
Philippines 4049 3599
Indonesia 47139 52396
India 425 -
Sweden 6018 10932
Denmark 326 1662
UK 0 214
France 827 -
Germany 237 3125
Spain 1661 -
Italy 11573 20556
Finland 6900 -
Poland 15071 19704
Austria 0 -
Romania 932 2141
Turkey 0 -
Bosnia 347 3550
Slovakia 11673 5350
USA 28062 24308
Total 1596551 1885398

Source: Minisy of Finance Japan

Оставить комментарий