Japan
Wood Products Prices
Dollar Exchange Rates of 10th
Jul
2024
Japan Yen 161.70
Reports From Japan
Confidence returns
Confidence among Japan's large manufacturing firms
showed a modest recovery for the first time in six months,
according to the latest "Tankan" survey from the Bank of
Japan marking the first improvement in two quarters.
The index for large non-manufacturing companies stood at
33 points, down two points compared to the first quarter of
2024 and for the first time in 16 quarters, but still close to
the maximum values since the bursting of the economic
bubble in the nineties.
See: https://www.agenzianova.com/en/news/Japan-
manufacturing-business-confidence-improves-for-the-first-time-
in-six-months/
In related news, the total value of machinery orders
received by 280 manufacturers operating in Japan
increased by 12% in March from the previous month on a
seasonally adjusted basis. In the January-March period it
increased by 6.3% compared with the previous quarter.
Private-sector machinery orders, excluding volatile
ones
for ships and those from electric power companies,
increased a seasonally adjusted by 3% in March and rose
by 4.4% in the January-March period.
In the April-June period machinery orders were
forecast to
decrease by 0.1% and private-sector orders, excluding
volatile ones, were forecast to fall by 1.6% from the
previous quarter.
Weak yen a big problem for SMEs
A recent survey by the Japan Chamber of Commerce and
Industry (JCCI) showed the yen’s dramatic decline has
become a serious problem for Japan’s small and medium
size businesses as they experience surging raw material
and energy prices.
According to the survey of 2,008 small enterprises, around
half of the respondents said that the weakness of the
Japanese currency was a big problem for their operations.
Only 2% in the latest survey said that the weakening of the
yen positive for their business.
See:
https://www.japantimes.co.jp/business/2024/07/04/companies/na
gata-weak-yen-small-business/?utm_
Encouraging corporate investment in emerging
economies
The government is encouraging corporate investment
in emerging and developing countries by providing
guarantees through the Japan International Cooperation
Agency (JICA). Guaranteeing loans is not currently
among the aims and law governing JICA.
The aim of the government is to set up a mechanism that
enables JICA to compensate for losses. The government
seeks to deepen relations with those economies by
building a support system with the private sector. Foreign
Minister Yoko Kamikawa said that she would work
with government ministries and agencies to revamp ODA
with an eye on amending the JICA law.
A panel presented suggestions to the minister on the best
ways to combine public and private funds.
See: https://asia.nikkei.com/Politics/International-
relations/Japan-to-offer-guarantees-on-corporate-investments-in-
Global-
South?utm_campaign=GL_JP_update&utm_medium=email&ut
m_source=NA_newsletter&utm_content=article_link
and
https://www.jica.go.jp/activities/issues/private_sec/__icsFi
les/afieldfile/2024/05/29/Asia_investment_promotion_en_
1.pdf
Consumer confidence up slightly in June
The seasonally adjusted Consumer Confidence Index was
up slightly in June according to the Cabinet Office. The
income growth indicator rose while the overall livelihood
index declined and the employment index dipped month
on month. The willingness to buy durable goods index
hovers at a multi-month low.
The percentage of respondents who expect prices to
increase over the next year was 94%, up from May, while
3% of those surveyed see them unchanged and the balance
expect prices to fall.
See: https://breakingthenews.net/Article/japans-consumer-
confidence-improves-in-june/62300247
Tax-free investment scheme a factor driving down
yen
Overseas asset purchases by Japanese individuals through
a recently introduced tax-free investment scheme have
been identified as a major factor driving down the yen
exchange rate. According to data from the Ministry of
Finance, Japanese investment trust management
companies and asset management firms purchased almost
US$40 billion more offshore equities and investment fund
shares than they sold during the first six months of this
year.
These offshore investments are possible through a revised
Nippon Individual Savings Accounts (NISA) programme.
Shifting savings into investments helps beat the effects of
inflation. The recent consumer price index stood at 2.1%,
above the Bank of Japan's price stabilisation target of 2%.
There are few financial products in Japan that generate
returns of more than 2%. Japanese government bonds
being sold to retail investors this month offered yields
below 1%.
See:https://asia.nikkei.com/Business/Markets/Currencies/Japan-
households-offshore-investments-top-trade-deficit-weakening-
yen2
The yen surged against the US$ mid-month after the
release of weaker than expected US inflation data. At the
same time it appears that the Japanese government and the
Bank of Japan intervened to try and strengthen the yen.
The yen strengthened to 157 after the June US consumer
price index showed prices declined from the previous
month marking the first monthly drop since May 2020.
The yen had plunged as low as 162 in early July, its
weakest since December 1986.
Best place to live survey
In a recent national regional survey to rank the ‘desirable
place to live’ Tokyo slipped to third place giving way to
Yokohama as the best and Omiya area in the city of
Saitama second. This marked the first time since the
annual survey began in 2009 that Tokyo has fallen below
the No. 2 spot while Yokohama kept its No. 1 ranking for
the seventh year in a row.
See:
https://mainichi.jp/english/articles/20240301/p2a/00m/0na/009000c
Import update
The severe weakness of the Yen against the US dollar
continues to drive up the cost of imports and drive down
discretionary purchases by Japanese households. The Yen
value of some furniture items has risen but it is unclear
whether this is the effect of the exchange rate or demand
in Japan.
April 2024 wooden office furniture imports (HS
940330)
In a change of ranking the top shippers of wooden office
furniture (HS940330) to Japan were China supplying over
70% of April imports followed by the UK at 15%.
Shippers in Malaysia were beaten to third place by the
surprising UK imports.
The value of exports of HS940330 from China to Japan
in
April rose from a month earlier. The high value of
shipments from the UK was a record since the UK did not
appear in the list of March shippers of wooden office
furniture. April shipments from Malaysia were around half
the value of March shipments.
Year on year, the value of Japan’s imports of wooden
office furniture in April 2024 increased by over 40% and
month on month the value of imports was up by 40%.
April 2024 kitchen furniture imports (HS 940340)
Year on year, the value of imports of wooden kitchen
furniture items (HS940340) in April were little changed.
The same trend was observed when comparing the value
of April imports with that of March.
The top shippers in April were the Philippines, accounting
for about 47% of the value of April imports followed by
Vietnam at 37% with shippers in Germany driving imports
to third place pipping Thailand which was, in previous
months in third place. The top three shippers accounted for
around 85% of the value of April imports.
After two consecutive monthly increases in the value of
imports of wooden kitchen furniture there was only a
slight increase in the value of April imports.
April 2024 wooden bedroom furniture imports (HS
940350)
The steady month on month rise in the value of wooden
bedroom furniture (HS930350) imports there was a
correction in March but that was short lived as the value of
April imports moved higher.
Year on year, the value of April imports was up 19% and
there was a 15% month on month increase in the value of
imports. China accounted for just over 60% of the value of
April imports to Japan followed by Vietnam at 32% and
Malaysia at 3%.
The April increase in the value of imports was almost
entirely due to the rise in imports from China compared to
a month earlier. The top three shippers accounted for over
90% of the value of April wooden bedroom furniture
imports.
April 2024 wooden furniture parts imports (HS
940391)
Shippers in just three countries, China, Indonesia and
Vietnam accounted for around 70% of the value of April
imports of wooden furniture parts. Suppliers in China
accounted for around 43% of April arrivals, up slightly
from the previous month, followed by Indonesia at 17%.
Malaysia was a significant shipper in March but the value
of April shipments was down sharply.
Compared to the value of February imports the value of
March imports from China were down around 14% and
there was a 25% decline in the value of imports from
Vietnam while the value of March arrivals from Indonesia
and Malaysia were at around the same level as in
February.
Year on year the value of April arrivals of wooden
furniture parts was up 14% bu compared to the value of
March imports there was little change.
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 reproduce news on the Japanese market
precisely as it appears in the JLR.
For the JLR report please see:
https://jfpj.jp/japan_lumber_reports/
Demand and supply of lumber at Tokyo port
According to Tokyo Lumber Terminal Co., Ltd., the
lumber inventories in June, 2024 have increased for four
months continuously. The arrival volume of lumber
decreases slightly and the shipment of lumber is low. The
arrival volume exceeed the shipment.
European lumber is 19,000 cbms and this is 6,000 cbms
less than May, 2024. The vessel had to avoid passing
through the Suez Canal to Japan from Europe and there
were a lot of lumber arrived to Japan last month. However,
the arrival volume of European lumber is settled down in
June, 2024. The volume of North American lumber is
12,000 cbms and this is 5,000 cbms less than the previous
month.
The arrival volume is also settled down in June, 2024.
Russian lumber is 9,500 cbms and this is 800 cbms down
from last month. Due to a confusion of logistic
circumstance in Russia, there is a big difference in arrival
volume of Russian lumber in each month. Even though the
arrival volume of several countries’ lumber is low, the
volume of shipment does not grow due to low demand for
lumber in Japan.
The inventory of North American lumber is 47,000 cbms
and this is 1,000 cbms more than last month. European
lumber is 41,000 cbms and this is 3,000 cbms higher than
the previous month. Russian lumber is 16,000 cbms and
this is 1,000 cbms up from last month.
Plywood
Movement of domestic softwood plywood June 2024 had
consumers buy plywood to fill current needs. The price
reached the bottom until Maybut the price of plywood has
been bearish after June. Plywood manufacturers
announced to raise the price of plywood because the log
and transport cost has increased
Movement of plywood in May was not good then the price
started to decrease. The price of 12mm 3x6 domestic
structural softwood plywood was 1,270-1,280 yen
delivered per sheet, in the beginning of June the price was
1,230 delivered per sheet.
Plywood manufacturers in Indonesia and Malaysia still
expect to raise the price because there are not enough logs.
12mm 3x6 painted plywood for concrete form is
aroundUS$650,C&F per cbm. Structural plywood is
around US$570 C&F per cbm. Plywood form is around
US$570 C&F per cbm. 2.4mm 3x6 normal plywood is
around US$950 C&F per cbm. 3.7mm normal plywood is
around US$880 C&F per cbm, 5.2 mm normal plywood is
US$850 C&F per cbm.
In Japan, 2.5 mm normal plywood is 780yen delivered per
sheet. 4mmnormal plywood is 1,000 yen delivered per
sheet. 5.5 mm normal plywood is 1,170-1,200 yen
delivered per sheet. Plywood form is 1,750 yen delivered
per sheet. 12mm 3x6 painted plywood for concrete form is
1,950 yen delivered per sheet
Orders for house builders
Major housing companies’ results in May, 2024 exceed
May, 2023. However, it is hard to say that low demand for
houses is solved because the results of May, 2023 were
very bad. The sales of high-priced houses are good but a
number of orders is not enough. The inquiries and
document requests to the housing companies have
recovered slightly but many clients wait and see to
purchase a house or not because they are concerned about
the unstable economies.
There is a last-minute increase in demand for unit built for
sale due to the heightened expectations of higher interest
rates. The orders for apartment buildings and remodeling
of a house are firm compared to the orders for detached
houses..
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