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Japan logs goods trade surplus for fourth consecutive half

Kyodo

Japan chalked up a goods trade surplus of ¥1.92 trillion ($17 billion) in the fiscal first half amid robust exports to Asia and the United States, but was squeezed by rising energy imports, government data showed Thursday.

The surplus for the April-September period, the nation’s fourth in a row, fell 20.3 percent on year but came as exports grew 12.8 percent — the fastest pace since 2010 — to ¥38.37 trillion, the Finance Ministry said in a preliminary report.

Imports meanwhile surged 15.3 percent to ¥36.45 trillion, the report said..

Shipments of cars to the U.S. and of electronic and auto parts to China grew markedly in the period.

“Auto exports increased but so did auto parts, which reflects the fact that (automakers are) making progress in local production” a ministry official said.

Japan ran a trade surplus of ¥3.38 trillion with the U.S. as exports rose 10.6 percent to ¥7.42 trillion and imports gained 12.1 percent to ¥4.03 trillion.

U.S. President Donald Trump, calling for “fair” trade, has taken issue with his country’s massive trade deficits with major exporters such as Japan.

In a semiannual report to Congress, the U.S. Treasury has said it remains “concerned by the persistence of the large bilateral trade imbalance between the United States and Japan.” Trump will visit Japan next month.

Exports to China, another major destination for Japanese products, rose 21.7 percent to ¥7.27 trillion, a record high for the first half, while imports rose 7.8 percent to ¥8.81 trillion, translating to a ¥1.54 trillion deficit.

With other Asian countries including China, Japan logged a trade surplus of ¥3.10 trillion after exports gained 16.0 percent to ¥20.97 trillion and imports rose 12.4 percent to ¥17.87 trillion.

With the European Union, Japan reported a deficit of ¥16.1 billion, the data showed. Exports to the bloc rose 10.5 percent to ¥4.30 trillion and imports grew 10.1 percent to ¥4.31 trillion.

“Exports to the United States will likely stay firm, with car demand expected in the aftermath of the recent hurricanes,” said Toru Suehiro, senior market economist at Mizuho Securities Co.

“After very strong growth, however, we need to keep tabs on exports to China even though its economy has so far been in good shape,” Suehiro added.

The dollar traded at ¥111 on average during the six-month period, higher than ¥106.14 a year earlier. A weak yen tends to boost imports in value terms.

Japan’s overall imports in the first half were largely boosted by coal, liquefied natural gas and crude oil, the data showed. Japan relies heavily on other countries to meet its energy needs.

For the July-September quarter, exports were likely to have supported the economy even as domestic demand, particularly private consumption that was robust in the previous quarter, was expected to be weak, according to economists. Gross domestic product data for the quarter will be released in mid-November.

In September alone, Japan posted a goods trade surplus of ¥670.2 billion after a 14.1 percent gain in exports to ¥6.81 trillion and a 12.0 percent increase in imports to ¥6.14 trillion.

The figures were measured on a customs-cleared basis.