Asia ex-Japan aggregate exports Report Interpretation

Overview

This Asia Chart Alert assesses Asia ex-Japan export momentum through Nomura’s leading export index. Nomura concludes that export growth remains in full swing, supported primarily by technology demand and shipping activity, while identifying consumer-demand and semiconductor-supply risks.

Core views

Nomura’s leading index of Asia ex-Japan aggregate exports (NELI) rebounded to 123.3 in October following a slight decline in September. This was the index’s strongest reading since April 2010 and, in Nomura’s view, confirms that the region’s export growth remains in full swing. The index is designed to lead aggregate exports by three months, has identified major prior turning points, and is intended to be less affected by base effects than official export data. The latest pickup was driven by technology-related indicators and the Shanghai containerized freight index. Nomura interprets the freight measure as evidence of strong consumer-goods shipments to the US, linking shipping activity with continuing external demand for Asian exports. Nomura argues that strong AI investment and rising chip prices amid persistent supply shortages are underpinning exports. Its Chip Shortage Index remains deep in shortage territory, which the institution says suggests that the current semiconductor upcycle could continue beyond 2027. This technology cycle is therefore central to its constructive outlook for regional exports. The report nevertheless identifies two risks it is monitoring: soft domestic demand in China, and chip supply constraints that raise PC and smartphone prices. Higher electronics prices could weaken consumer-electronics demand and offset some of the export support from the technology cycle.

Analysis framework

Nomura uses NELI as a three-month-leading momentum indicator for Asia ex-Japan exports. The index is a weighted sum of Z-score-standardized indicators, including container freight rates, Chinese imports, semiconductor sales and exports, manufacturing surveys, and the Philadelphia Semiconductor Index; the weights are based on inverse mean-square errors. Nomura then interprets the latest index movement alongside semiconductor-shortage conditions and shipping demand.

Methodology notes

• Other

  Nomura's leading index of Asia ex-Japan aggregate exports (NELI)

  NELI is a weighted composite of standardized trade, shipping, semiconductor and manufacturing indicators. Nomura uses its three-month lead time and historical turning-point record to assess underlying export momentum.

Key data

• NELI reading123.3October reading, following a slight September dip
• Historical comparisonStrongest since April 2010Nomura views this as confirmation of strong export growth
• NELI lead timeThree monthsThe index is designed to lead Asia ex-Japan aggregate exports
• Potential semiconductor-cycle durationBeyond 2027Suggested by Nomura's Chip Shortage Index remaining deep in shortage territory

Impact & implications

Nomura’s reading implies continued strength in Asia ex-Japan export momentum, with technology demand and consumer-goods shipments providing support. The outlook remains exposed to weaker Chinese domestic demand and to chip-driven electronics price increases that could restrain consumer demand.

Risks

• Soft domestic demand in China could weaken the export outlook.
• Chip supply constraints could raise PC and smartphone prices and weigh on consumer-electronics demand.

What to watch

• China’s domestic-demand conditions.
• Whether chip supply constraints continue to push up PC and smartphone prices.
• Technology-related indicators and the Shanghai containerized freight index.