Specifically, the recent weak exports and production are caused by supply-side constraints such as parts shortages. On the back of continued strong recovery in overseas economies, particularly advanced economies, Japanese firms are facing solid demand, mainly for digital-related goods. Therefore, as supply of parts resumes, exports and production are likely to increase firmly again.
In fact, the COVID-19 situation in Southeast Asia, which triggered the current supply-chain disruptions, has been on an improving trend, and factory production has been resuming in the region. It is expected that a recovery in production to catch up with demand and the restocking of inventories that had been reduced to a large degree will boost production activity.