Flash: Breaking down Asian exports by destination - Nomura

FXstreet.com (Barcelona) - Nomura economist Rob Subbaraman notes that there has been a broad-based weakening, but intra-Asian exports are holding up best.

He begins by commenting that exports from Asia, the world's manufacturing hub, are often regarded as a bellwether for the health of the global economy. He estimates that on a 3-month moving-average basis, growth of Asia ex-Japan's aggregate exports slowed from 9.5% y-o-y in March to 3.8% in April. Further, he feels that when examining Asian exports by destination, he can see that growth in shipments to the US fell from 2.2% y-o-y in March to -2.8% in April, in line with his US team's view of a temporary soft patch in the US economy in Q2. Further, he notes that the deceleration in shipments to the EU deepened, from -2.9% y-o-y to -7.3%, reflecting the recession there spreading to core economies. The deceleration in shipments to Japan also deepened, from -4.2% y-o-y to -9.3%, probably reflecting JPY depreciation. He writes, “In contrast, intra-Asian trade has been quite resilient, with growth slowing from 18.2% y-o-y in March to a still-strong 12.6% in April. This is corroborating evidence that Asian domestic demand is holding up, buoyed by capital inflows, loose policies and low unemployment.”