Japan posted a goods trade surplus of ¥3.41 billion ($32.1 million) in February amid continued strength in exports, but rising energy imports weighed on the black ink, government data showed Monday.
The trade surplus came as exports rose 1.8 percent from a year earlier to ¥6.463 trillion, up for the 15th straight month, while imports soared 16.5 percent to ¥6.460 trillion. Japan has benefited from strengthening overseas demand as global economic growth has gained traction.
But the surplus shrank 99.6 percent in February due largely to the impact of China’s Lunar New Year holidays that began in mid-February — later than those a year ago. Exports to China tend to decrease while imports often gain around the holidays.
Exports to Asia fell 3.2 percent, the first drop in 16 months, to ¥3.38 trillion, dragged down by a decrease in shipments to China, Japan’s major trading partner. Imports from Asia jumped 26.5 percent to ¥3.15 trillion, leading to a 77.2 percent year-on-year fall in surplus to ¥226.8 billion. Japan had a trade deficit with China of ¥425 billion as imports of clothes were robust.
Imports surged 39.2 percent to ¥1.51 trillion while exports slid 9.7 percent to ¥1.08 trillion.
“Demand from Asia is expected to support Japan’s exports but we will have to see whether the rising trend will continue or if signs emerge of a slowdown from March onward,” said Yuichiro Nagai, an economist at Barclays Securities Japan Ltd.
The trade surplus with the United States expanded 3.4 percent to ¥630.9 billion, marking the first rise in three months.
Increased demand for hybrid cars helped lift overall exports by 4.3 percent to ¥1.28 trillion while imports gained 5.2 percent to ¥645.3 billion.
A trade surplus of ¥46.9 billion was logged with the European Union, according to a preliminary report by the Finance Ministry.
As the country relies heavily on imports to meet its domestic energy needs, prices of crude oil and other resources have a strong bearing on trade. The value of crude oil imports was up 2.5 percent to ¥659.7 billion.
The recent rise in the yen’s value is also a key factor to watch, according to economists. “The yen’s gain would reduce exports but for now demand in Asia remains strong. In that situation, it will likely have a bigger impact on the value of imports,” Nagai added.
“In principle overseas economies are doing well, so I don’t see exports losing steam,” Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co., said before the data was released.