Japan Wood Products
Dollar Exchange Rates of
10th June 2015
Japan Yen 122.40
Reports From Japan
GDP revised sharply upwards
Japan's economic growth increased faster than expected in
the first quarter. Revised data showed the economy
performed the best since the consumption tax rise last
year. While the January-March quarter growth was
boosted by better than forecast consumer spending and by
expanded corporate investment, economists anticipate
slower growth in second quarter. On a quarterly basis the
economy grew 1% compared with the initial 0.6%
On the down side, consumer spending, while better than
forecast, was still the lowest level since last summer in
April, and industrial output may well have contracted this
quarter. The first quarter data suggest the Japanese
economy is gradually recovering from the negative impact
of the consumption tax increase.
Machinery orders highest since 2008
April private-sector machinery orders (excluding volatile
orders) rose a seasonally adjusted 3.8% month on month
marking the second consecutive improvement as
companies showed more willingness to investment in
anticipation of a stable economy (see graphic below).
The value of machinery orders (excluding volatile orders)
in April were the highest since July 2008. In its latest
assessment the Cabinet Office wrote “orders have been
picking up," the first time on months that such a positive
statement has been seen. Business investment in Japan
accounts for around 15% of Japan's GDP and is closely
Consumer confidence index falls unexpectedly
Japanese consumer sentiment fell unexpectedly in May
according to data released by the cabinet Office.
The seasonally adjusted overall consumer confidence
index fell to 41.4 in May from 41.5 in April confounding
economist who had expected a rise.
The livelihood index rose to 38.8 and the income growth
index increased to39.8 but the indicator for employment
fell as did the willingness to buy durable goods.
Yen falls then rebounds from 14 year low
The yen weakened below 125 to the US dollar hitting a 14
year low as traders moved to the US currency in
anticipation of an interest rate rise. Over the past weeks
the dollar has strengthened against most major currencies.
However, the slide in the yen was brought to a halt by
comments from Bank of Japan Governor who signaled the
Banks preference for currency stability which was
interpreted as possible support for the yen by the Bank.
Land prices mirror urban/rural divide
The Ministry of Land, Infrastructure, Transport and
Tourism, in its latest annual survey shows that commercial
land prices have stopped falling in urban areas for the first
time in seven years as urbanites benefit from the modest
economic growth most.
However, nationwide residential land prices fell 0.4% last
year but the pace of decline showed signs of easing.
The highest land price in Japan was yen 33.8 million
(about US$273,000) per square metre in the heart of the
Tokyo commercial district.
However, around 75% of the prefectures in japan posted
year-on-year declines in land prices a clear sign of the gap
in an economic recovery between the main urban areas
and the countryside.
Import round up
Japan‟s imports of wooden doors reversed course in April
rising 15% from March but compared to levels in April
2014 imports were down 17%. China, Philippines and the
USA are the main suppliers accounting for approximately
87% of total wooden door imports.
Wooden window imports to Japan in April 2015 were up
23% from March but year on year April 2015 imports
were down 19%.
April 2015 imports of assembled flooring were up a
massive 57% compared to levels in March but this
disguises the fact that year on year, April 2015 imports
were some 24% down.
Malaysia maintained its position as the number one
supplier of plywood to Japan in April but Indonesian
exports of plywood to Japan rose almost 18% to around
Of particular note was the almost doubling of plywood
imports from Chinain April. However, April 2015 imports
from the top three suppliers Malaysia, Indonesia and
Chinawere lower than in April a year earlier.
Trade news from the Japan Lumber Reports (JLR)
For the JLR report please see:
Imported South Sea (tropical) hardwood plywood
Inventories of concrete forming South Sea hardwood panel
have been gradually digested. Sarawak plywood suppliers
are bullish because of log shortage but due to depressed
market in Japan.
Future purchase is getting down and order balances are
getting less now so only concern is port inventories in
In Sarawak, log production continues low by tight control
of illegal harvest by the provincial government so major
plywood mills‟ experience 50% of log purchase volume
compared to normal time so that their operation is down
by half. Some smaller mills are forced to shut-down.
Local plywood mills retrain from accepting orders from
Japan because of critical log supply situation. The mills
are not able to figure out future log prices in decreased log
production and they take plywood orders within limit of
log availability with reasonable prices and they have to
increase the prices for future production.
The importers have to buy limited future volume since
there is wide gap between stagnant market prices in Japan
and the spiraling suppliers‟ asking prices.
The situation has not changed since December last year
when the monthly average yen‟s exchange rate dropped
down to 118 yen per dollar, which reflected low arrivals of
224,200 cbms in March.
As a result of low arrivals, congestion of ships in major
ports in Japan since late last year is finally coming to end
but shipment of the cargoes from ports are slow so that the
supply seems excessive as long as port inventories are
Now some importers have no more order balance with
Sarawak suppliers and other future purchase volume is
being held down minimum.
Orders for speculative items like concrete forming panel
are very little and the importers have only half of what
they request in volume for future purchase. Accordingly,
low level monthly arrival seems to continue.
Export duty on Canadian softwood lumber for the U.S.
A duty imposed on Canadian softwood lumber shipped for
the U.S. market will be 10% since June shipment.
Housing starts in the U.S.A. during the first quarter were
slow in winter months and lumber export for Japan and
China decreased so that sawmills‟ operation in the U.S.A.
is way down with high lumber inventory.
In particular, China reduces purchase of North American
lumber largely while it increases purchase from Russia
and Europe because of advantage of exchange rate.
South Sea (tropical) logs
Log market in supplying regions is all firm for export to
Japan. Sabah and Sarawak in Malaysia are in dry season
now so weather is ready for log production but log
production drops down to 50% of normal time because the
government is taking severe control on illegal harvest.
In middle of May, the Malaysian government stepped up
to investigate tax evasion by illegal logging and frozen
bank accounts of log industry people in Sarawak.
In Sabah, the same measures are taken but it is reported
that there is no influence on production and business of
plywood operations by this investigation.
By low log production, log market has been firming. India
has started buying logs again in April after some break in
March and log prices of keruing and kapur are climbing.
Kapur prices are up to US$400 per cbm FOB from
US$360 in April and keruing prices are US$410-420 from
US$370. Low grade meranti for India is also up to
US$280 from US$260, which pushes log prices for Japan.
Log prices for Japan are US$290-300 per cbm on yellow
meranti regular and US$250-260on meranti small.
In PNG, log prices for China dropped by US$10-20 after
China curtailed log purchase due to demand slump in
China. It is reported that hardwood log inventories in
China are four months or 1,300—1,400,000 cbms.
India is increasing sending more ships to PNG because of
tight supply in Sarawak.
Sales of logs and lumber auction markets
There are twelve logs and lumber auction markets in
Tokyo region. Log suppliers and lumber mills sent logs
and lumber to sell their products by auction. Sawmillers
come to buy logs and lumber wholesalers come to buy
lumber including imported lumber.
Total sales amount in twelve markets in April was 1,459
million yen, 11.7% more than April last year, which is the
first increase since March last year. However, compared to
March this year, it is 1.6% down. Average unit price was
62,578 yen, 5.8% down from April last year.
Total sales in 2014 were 19,499 million yen, 7.9% less
than 2013. Peak of monthly sales were 2,230 million yen
in March, 36.6% more than the same month a year ago
then April sales were down by 22.6% at 1,359 million yen.
Since then monthly sales had stayed lower than a year ago