Business / Economy

February exports lift Japan's trade surplus to largest in seven years

Kyodo

Japan posted a trade surplus of ¥813.4 billion ($7.29 billion) in February, the largest in nearly seven years, as exports to China showed solid growth, the Finance Ministry said Wednesday.

Sharp gains in shipments of car parts to China and electronics parts to Hong Kong helped lift overall exports, which jumped 11.3 percent from a year earlier to ¥6.35 trillion — the third straight month of increase.

Imports climbed 1.2 percent year on year to ¥5.53 trillion as the value of crude oil imports increased, the ministry said in a preliminary report.

The month’s trade surplus is the biggest since March 2010 when the country posted a ¥931.9 billion figure.

Japan logged its first trade surplus with China since February 2012, with the balance standing at ¥111.77 billion. Exports surged 28.2 percent to ¥1.20 trillion, while imports fell 17.7 percent to ¥1.08 trillion.

The export figures in February reflect the impact of the Lunar New Year holidays that began in late January, according to a ministry official. This year’s holidays began earlier than in 2016.

Exports to China tend to drop during the holidays. In January, imports gained more than exports, leading to the first trade deficit in five months of ¥1.09 trillion with imports from China and the United States growing 7.2 and 11.9 percent respectively.

Trade balance with the United States came in at a surplus of ¥611.27 billion in February, marking the first expansion in three months. Exports rose 0.4 percent from the year before to ¥1.22 trillion, boosted by increased shipments of auto parts and cars. Imports dropped 0.7 percent to ¥611.90 billion.

Even as recovering exports have given the economy a boost in recent months, domestic demand remains weak.

Unclear details about U.S. President Donald Trump’s economic and trade policies have added to uncertainty in Japan’s outlook. In the past, Trump has taken issue with U.S. trade deficits with countries such as China and Japan.

“We need to see more data coming out in March but it’s safe to say that the trend of recovering exports is continuing,” said Toru Suehiro, senior market economist at Mizuho Securities Co.

“I don’t expect growth (in exports) to continue at this pace,” Suehiro said, adding a note of caution, and forecasting a slowdown in the Chinese and U.S. auto markets.

Shipments from Japan to the European Union increased 3.3 percent to ¥700.58 billion, while imports decreased 7.5 percent to ¥659.45 billion.

Resource-poor Japan relies heavily on energy imports. Most of the country’s nuclear power plants remain offline following the 2011 Fukushima nuclear disaster that raised safety concerns among local residents.

The value of crude oil imports surged 69.9 percent from a year earlier to ¥642.8 billion.

The figures were measured on a customs-cleared basis.

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