Core Viewpoint - The global trade outlook remains uncertain due to the impact of U.S. tariff policies, particularly affecting trade with the U.S. [1] Export Performance - Japan's exports in August decreased by 0.1% year-on-year, marking the fourth consecutive month of decline [1] - Exports to the U.S. fell by 13.8%, worsening from a 10.1% decline in July, and this represents the largest drop since February 2021 [1] - Specific export categories such as automobiles, steel, and auto parts experienced declines of 7.9%, 14.9%, and 12.6% respectively [1] Import and Trade Balance - Japan's imports decreased by 5.2%, resulting in a trade deficit of 242.53 billion yen (approximately 11.77 billion RMB) [1] - Growth in exports to Asia and Europe partially offset the significant decline in exports to the U.S. [1] Economic Implications - The trade shocks pose risks to Japan's already fragile economic growth, potentially disrupting the desired cycle of inflation, wage growth, and economic expansion [1] - Increasing evidence suggests that U.S. tariff hikes are impacting shipments to the U.S. [1]

Economic Performance Overview - Major economies have shown varied performance in Q2, with the U.S. tariff policy impacting trade differently across countries [1][4] - China's GDP grew by 5.3% year-on-year in H1, with Q2 growth at 5.2% year-on-year and 1.1% quarter-on-quarter, driven by strong exports and macroeconomic policies [2] - The U.S. GDP increased by 3% on an annualized basis in Q2, recovering from a 0.5% contraction in Q1, influenced by a significant drop in imports and increased consumer spending [2] - The Eurozone's economy grew by only 0.1% quarter-on-quarter in Q2, the lowest since early 2024, with Germany and Italy experiencing a 0.1% contraction [2] Regional Economic Insights - South Korea's economy rebounded with a 0.6% quarter-on-quarter growth in Q2, supported by increased exports and domestic demand [3] - Vietnam's GDP grew by 7.52% year-on-year in H1, with Q2 growth at 7.96%, attributed to accelerated procurement by foreign buyers ahead of potential U.S. tariffs [3] Tariff Policy Implications - Experts warn of the structural changes in supply and demand relationships due to U.S. tariff policies, predicting significant pressure on global economic growth in Q4 and 2024 [4] - Short-term behaviors, such as companies stockpiling goods to avoid tariff impacts, may lead to trade cycle disruptions, which are not sustainable for long-term growth [4] Global Economic Outlook - The IMF has revised global economic growth forecasts for the next two years to 3% and 3.1%, influenced by factors such as preemptive stockpiling by importers and improved financial conditions [5] - Despite the positive adjustments, the IMF cautions that global economic activities remain distorted due to heightened tariff expectations and geopolitical tensions [5] Cooperation and Trade Framework - The IMF emphasizes the importance of pragmatic cooperation among economies to reduce trade barriers, suggesting that a predictable trade framework could enhance global economic growth [6]

Core Viewpoint - The IMF indicates that the global economy is weakening and is increasingly vulnerable to trade shocks [1] Group 1 - The IMF's assessment highlights a decline in global economic activity, suggesting a potential slowdown in growth rates [1] - Trade tensions and geopolitical uncertainties are identified as significant factors contributing to the economic downturn [1] - The report emphasizes the need for countries to adopt policies that can mitigate the impact of trade disruptions [1]

Group 1 - The core viewpoint of the article is that the global economy is weakening and is vulnerable to trade war impacts [1] Group 2 - The International Monetary Fund (IMF) has indicated that the global economic outlook is deteriorating [1] - The potential for trade wars to exacerbate economic challenges is highlighted [1]

Group 1 - The International Monetary Fund indicates that the global economy is weakening and is vulnerable to trade shocks [1]

Global Economic Outlook - The economic momentum in the US and non-US regions is expected to converge, primarily driven by a slowdown in the US economy [2][3] - Non-US regions benefit from a more accommodative monetary policy environment, with GDP output gaps still not positive according to IMF estimates [2][3] - The European market is viewed positively due to the convergence of economic growth momentum with the US, despite facing uncertainties [3][12] Industry Preferences - Analyst preferences for industries in the second half of the year are ranked as follows: Technology (Telecom, Software, Advertising > Electronics > Content), Industrial (Power Equipment > Automation), and Financials [1][2] - Caution is advised for consumer and consumer-related manufacturing sectors (home appliances, automobiles) and bulk raw materials [1] European Market Insights - The European market is expected to perform relatively well, supported by fiscal policy and defense spending, which may boost investor and consumer confidence [3][12] - The impact of tariffs on the European GDP is estimated to be a direct effect of 0.2% to 0.4%, with indirect effects around 0.2% [12][13] - The labor market remains strong, and energy prices are declining, providing additional support for the European economy [13] Emerging Markets - Emerging markets show marginal upward potential, but overall absolute performance may be limited, requiring regional selection [4][22] - Factors favoring emerging markets include continued policy rate declines and the worst trade news potentially being priced in [4][22] - Challenges include limited improvement in risk appetite due to policy uncertainties and high US Treasury yields [4] Japan's Economic Outlook - Japan's economy is expected to experience moderate recovery in the second half of 2025, with inflation remaining high [15][16] - The Bank of Japan may consider raising interest rates in response to economic conditions, with a potential increase to 0.75% [15][17] - Japanese stocks are likely to be influenced by global market trends, particularly the US market [18] Southeast Asia Economic Trends - Southeast Asian economies are projected to experience growth, with GDP growth rates for countries like Vietnam and the Philippines expected at 6.5% and 5.3% respectively [22] - The region may face pressures from inventory cycles and trade negotiations, impacting growth in the latter half of the year [22][23] - Local currencies are showing signs of recovery against the US dollar, with notable increases in the Singapore dollar and Philippine peso [23] Industrial Sector Insights - The industrial sector is expected to benefit from energy transition, infrastructure projects, and data center investments, despite a slowdown in capital expenditure growth [52][54] - The automation sector is nearing the end of inventory destocking, with a positive outlook for recovery [54] - Power equipment demand is anticipated to remain strong, with limited tariff impacts due to localized production strategies [56][58] Consumer Goods and Automotive Sector - The consumer goods sector is facing challenges from tariffs, but large appliances are less affected due to domestic production [63][64] - The automotive market is still grappling with tariff uncertainties, but the overall impact is expected to diminish [66][68] - Electric vehicle sales may be impacted by the potential removal of tax credits in the US, while European automakers are negotiating to alleviate tariff pressures [68]

Group 1: Shipping Freight Index - The shipping index includes SCFI comprehensive index, SCFIS European route, and container index (European route) futures, which reflect the pricing of freight futures and the impact of tariffs [1][9][10] - The SCFI comprehensive index has shown a rebound since May 9, increasing by 9% compared to the end of March, influenced by export rush and transshipment [10][13] - The China Container Freight Index (CCFI) has fluctuated this year, hitting a low on April 3 and then rebounding, with the CCFI comprehensive index increasing by 0.2% from its low as of May 16 [13][15] Group 2: Port Cargo Throughput - Domestic port cargo throughput has shown resilience, with container throughput reaching a record high on April 27, 2023, despite a brief decline earlier in the month [2][20][23] - The Port of Los Angeles, the busiest port in the U.S., saw its import container throughput drop to the lowest level since June 2024 by May 10, indicating negative impacts from tariffs on U.S. imports and exports [2][22][24] Group 3: Domestic Production Activity - The high-frequency economic activity index from the First Financial Research Institute has been declining since the end of March but remains above 1, indicating stronger economic activity compared to the previous year [3][27][29] - The manufacturing PMI new export orders index fell from 49% to 44.7%, while the EPMI production index dropped from 67.7% in March to 51.6% [29][30] Group 4: Trade Outlook - South Korea's Export Situation - South Korea's export data showed stronger-than-seasonal growth in early April, with fluctuations in mid-April likely related to trade negotiations with the U.S. [4][30][32] - By May, South Korea's exports were weaker than seasonal expectations, indicating ongoing volatility ahead of the conclusion of U.S.-Korea trade talks [4][32][34]

Shipping Price Index - The SCFI composite index has shown a rebound of 9% from the end of March to mid-May, influenced by export rush and tariff impacts[10] - The CCFI index, the second largest shipping price index globally, fell to its annual low on April 3, down 27% from the end of 2024, but has since rebounded slightly[13] - The BDI index has been on a downward trend since late March, hitting a low on April 16 before a slight rebound, and then declining again from May 7[17] Port Cargo Throughput - Chinese port cargo throughput has shown resilience, with container throughput reaching a record high on April 27, surpassing 6 million TEUs[20] - The Port of Los Angeles, the busiest in the U.S., saw its import container throughput drop to the lowest level since June 2024 by May 10, indicating negative impacts from tariffs[22] Domestic Production Activity - The high-frequency economic activity index from the First Financial Research Institute has been declining since late March but remains above 1, indicating stronger activity compared to the previous year[29] - The manufacturing PMI new export orders index fell from 49% to 44.7%, while the EPMI production index dropped from 67.7% to 51.6%[29] Trade Outlook - South Korea's exports showed stronger-than-seasonal growth in early and late April, but weakened in mid-April, reflecting the impact of tariff negotiations with the U.S.[30] - The volatility in South Korean exports is expected to continue until the conclusion of U.S.-Korea trade negotiations[30] Risk Factors - Potential risks include unexpected geopolitical conflicts, domestic policy implementation falling short of expectations, and tighter overseas liquidity conditions[36]

Core Viewpoint - The European Central Bank (ECB) members are increasingly inclined to believe that trade shocks may lead to inflationary pressures beyond the short term [1] Group 1 - ECB members discussed the potential long-term impacts of trade shocks on inflation, indicating a shift in their perspective [1] - The meeting highlighted concerns regarding the sustainability of inflation rates in the context of ongoing trade tensions [1] - There is a growing consensus among ECB members that external trade factors could have lasting effects on the Eurozone economy [1]

Economic Outlook - Global economic growth is projected to decline from 3.2% to 2.7% in 2025 if new tariffs are implemented by the US [1][7] - The US economy is expected to slow down to 2.4% growth in 2025 from 2.8% in the previous year [1][7] - The Eurozone is forecasted to achieve only 1% growth in 2025, with Germany facing stagnation or a slight recession [1][7] Trade and Tariffs - New tariffs proposed by the US could significantly impact global trade, with potential tariffs of 60% on Chinese imports and 10-25% on imports from other countries [13][15] - The tariffs are expected to reduce global GDP by approximately 0.3% to 0.5% by 2026, with a notable decrease in global imports and exports by around 4% [18] - Germany, as an export-oriented economy, could see its GDP reduced by 0.4% in 2025 due to these trade restrictions [18] Monetary Policy - Central banks are facing challenges, with the Federal Reserve expected to maintain interest rates around 4% while the European Central Bank plans further cuts [2][7] - Diverging financial policies are affecting exchange rates, leading to a stronger US dollar against the euro and yen [2][7] Investment Environment - High interest rates are suppressing investment levels, particularly in construction and equipment, despite a recovery in consumer demand [2][3] - Emerging markets, especially in Asia, are showing stronger industrial production growth compared to regions like Africa and the Middle East [2][3] Consumer Behavior - In the US, consumer confidence remains low despite rising wages, with spending not increasing as expected due to inflationary pressures [3][4] - In Europe, countries like France and Italy are facing fiscal challenges that could hinder economic growth [3][4] Structural Challenges - The global economy is experiencing a complex recovery, with governments needing to balance economic stimulus and debt control [4] - Political uncertainties, particularly in the US and Europe, are complicating long-term economic planning for businesses [3][4]