Japan’s trade balance returned to a surplus in the last year for the first time in two years, though exports declined at a record pace due to the global economic downturn and China overtook the United States as Japan’s biggest trading partner, government data showed Thursday.
The surplus stood at ¥5.23 trillion for fiscal 2009 through March 31, compared with a deficit of ¥764.85 billion the previous year. But while the balance turned positive, it was the smallest surplus in 26 years, the Finance Ministry said in a preliminary report.
The improvement in the balance reflected slower imports amid the global economic slump rather than strength in exports.
Exports slid 17.1 percent from fiscal 2008 to ¥59.01 trillion, the second consecutive yearly fall and the sharpest drop since officials began compiling comparable data in fiscal 1979. Many major products, including vehicles and steel products, declined.
Imports were down 25.2 percent to ¥53.78 trillion, the second straight year of decline and the second fastest fall on record. Crude oil imports decreased 37.1 percent as average oil prices fell 25.5 percent to $68.9 per barrel.
Meanwhile, for March alone, exports grew for the fourth straight month, evidence that sustained gains in overseas demand are fueling the recovery as prices slump at home.
Shipments abroad advanced 43.5 percent from a year earlier, the Finance Ministry said. The median estimate in a survey of 14 economists was for a 45.4 percent gain.
Accelerating growth in Asia is prompting companies including Mitsubishi Electric Corp. to expand abroad and helping sustain what the International Monetary Fund terms a “tentative” Japanese recovery. The IMF said late Wednesday the Bank of Japan, which will hold a Policy Board meeting next week, must be ready to inject more stimulus should the rebound fail to stem deflation.
“A V-shaped recovery is taking place in exports and it’s been continuing for longer than expected because of solid demand from emerging nations,” said Junko Nishioka, chief economist at RBS Securities Japan Ltd. “A favorable cycle toward a full-fledged recovery is firmly under way.”
Japan posted a trade surplus of ¥948.9 billion in March, narrower than the median prediction for a ¥1.02 trillion gap, the Finance Ministry said. Imports rose 20.7 percent.
The improvement in overseas shipments last month was partly due to a favorable year-on-year comparison. In March of last year, shipments abroad tumbled 45.5 percent as global trade froze in the aftermath of the collapse of Lehman Brothers Holdings Inc. the previous September.
The value of shipments abroad totaled ¥6 trillion last month, lower than their peak of ¥7.7 trillion in March 2008. From a month earlier, March exports were unchanged on a seasonally adjusted basis, the Finance Ministry said.
“Asia, especially China, has been very strong, and the U.S. is coming back as well,” Yoshiki Shinke, a senior economist at Dai-ichi Life Research Institute, said before the Finance Ministry issued its report. Still, he added that “it will take a little more time” to return to precrisis levels.
Shipments to the U.S. grew 29.5 percent in March from a year earlier, while sales to Europe increased 26.7 percent, the ministry said. Exports to Asia advanced 52.9 percent, with those to China climbing 47.7 percent.
Domestic companies are tapping Asia’s accelerating growth.
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