Exports grew 14 percent in October from a year earlier to ¥6.69 trillion on strong demand for vehicles, electronics and machinery, but customs data released Monday showed even faster growth in imports of oil, gas and coal which caused the trade surplus to fall more than 40 percent from the year before.
As China recovers momentum following a slowdown, demand from the region’s biggest economy is helping breathe fresh life into its neighbors’ economies.
Exports are helping to drive a moderate recovery in Japan, the world’s third-largest economy, as its factories struggle to keep up with demand for cars, electronic components and manufacturing equipment.
At the same time, the nation’s imports have risen thanks to higher costs for crude oil and other commodities — surging 19 percent from the same month a year earlier in October to ¥6.41 trillion ($57 billion) versus exports of ¥6.7 trillion ($59 billion). The resulting surplus of ¥285.4 billion ($2.54 billion) compared with a ¥481.2 billion surplus a year earlier, and ¥667.7 billion in September.
China displaced the U.S. as Japan’s largest export market in October, as shipments to Asia’s biggest economy jumped 26 percent to ¥1.35 trillion ($12 billion). Its imports from China rose 14 percent to ¥1.62 trillion ($14 billion).
Japan’s surplus with the U.S. jumped 11 percent to ¥644.7 billion ($5.75 billion) on exports of ¥1.28 trillion ($11 billion), led by chemicals and machinery. Imports from the U.S. climbed 3.1 percent to ¥637 billion ($5.7 billion), with the highest growth seen in imports of fish, soybeans, coal, liquid petroleum gas and iron ore.
Imports of crude oil, gas, coal and other fuels surged 37.5 percent from a year earlier to ¥1.24 trillion ($11 billion). Rising prices and the weakening of the Japanese yen over the past year contributed to that increase.
“Looking ahead, the export climate index remains elevated and suggests that export growth will continue at a similar pace as the 6.4 percent year-on-year increase recorded last quarter,” Marcel Thieliant of Capital Economics said in a commentary.
But the economies of Japan’s major trading partners are likely to slow in the next year, he said. “We expect real export growth to slow from 6 percent year-on-year this year to 3 percent in 2018.”