NELI edges down slightly from elevated levels, while Asian export momentum remains robust

Overview

This report updates Nomura's Asia Export Leading Index (NELI), which is used to assess potential momentum in aggregate Asia ex-Japan exports. After rising for six consecutive months, the index declined slightly to 122.9 in September but remained near historical highs.

Core views

Nomura believes the latest decline is more likely consolidation at elevated levels than the beginning of a weakening export cycle. The AI technology supercycle continues to drive regional exports: global AI capital expenditure continues to expand, while demand for memory and advanced logic chips still exceeds supply.

Analysis framework

NELI, composed of nine components, tracks export momentum in Asia ex-Japan and serves as a leading indicator that is less affected by base effects than official export data; the index leads by about three months.

Methodology notes

• Leading indicatorNomura's leading index of Asian exports (NELI)

  Leading indicator of Asian export momentum

  NELI consists of nine components and leads aggregate Asia ex-Japan exports by about three months, aiming to identify trends and major turning points in export growth.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Export-oriented Asia ex-Japan equities

  Supported by improving regional export momentum

  Strengths

  NELI is near historical highs, supported by AI-related external demand and global capital expenditure.

  Weaknesses

  Some technology-related indicators and Chinese imports have already declined moderately.

  Comparison

  Compared with observing only official year-on-year export data, NELI is less affected by base effects and provides a roughly three-month leading perspective.

  Risks

  Supply-chain disruptions, weak domestic demand in China, and changes in AI-related supply and demand.

• Asian semiconductor supply chain

  A key beneficiary of the AI technology supercycle

  Strengths

  Demand for memory and advanced logic chips continues to exceed supply, while global AI capital expenditure continues to expand.

  Weaknesses

  Demand is concentrated in AI-related areas, and the durability of the upcycle still requires validation.

  Comparison

  Relative to non-technology export sectors, semiconductors benefit more directly from AI capital expenditure.

  Risks

  Supply-chain disruptions, shifts in supply-demand imbalances, and weakening end demand.

Key data

• Latest NELI level122.9The report states that the index edged down slightly in September but remained near historical highs.
• Prior consecutive months of gains6 monthsNELI had risen for six consecutive months before the decline.
• Lead timeAbout 3 monthsNELI leads aggregate Asia ex-Japan exports by about three months.
• Number of index components9Used to assess the region's underlying export momentum comprehensively.

Impact & implications

For export-oriented Asian assets, the report maintains a broadly positive macro backdrop, particularly benefiting supply chains driven by demand for AI servers, memory, and advanced logic chips. However, the pullback from elevated levels means that technology-related high-frequency indicators and Chinese imports should continue to be monitored, rather than extrapolating the strong trend as risk-free growth.

Risks

• Renewed supply-chain disruptions could weigh on regional production and exports.
• Weak domestic demand in China could continue to restrain imports and regional trade chains.
• A weakening in AI capital expenditure or chip supply-demand dynamics could reduce export momentum.
• Leading indicators near elevated levels do not rule out subsequent volatility or cyclical turning points.

What to watch

• Subsequent NELI readings and the breadth across its nine components.
• Whether technology-related indicators continue to decline.
• Changes in Chinese imports and domestic demand.
• Global AI capital expenditure and supply-demand conditions for memory and advanced logic chips.
• Whether new disruptions emerge in regional supply chains.