The nation posted a goods trade surplus of ¥2.46 trillion ($23 billion) in fiscal 2017 as strong overseas demand lifted the country’s exports to the second-highest level on record, the Finance Ministry said Wednesday.
The surplus, however, shrank 38.2 percent from a year earlier due to a surge in energy imports such as crude oil, liquefied natural gas and coal. Japan stayed in the black for the second straight year.
Exports gained 10.8 percent to ¥79.22 trillion, up for the first time in three years, as shipments of cars and semiconductor-related equipment surged. Imports rose 13.6 percent to ¥76.77 trillion for the first gain in four years.
Japan’s trade surplus expanded 5.7 percent to ¥7 trillion with the United States, a reading that could rattle U.S. President Donald Trump who is seeking to reduce his country’s large trade deficits.
In fiscal 2017, which ended in March, U.S.-bound exports gained 7.5 percent to ¥15.18 trillion and imports rose 9.1 percent to ¥8.18 trillion, the preliminary data showed.
Japan had a trade deficit of ¥3.36 trillion with China, down 20.3 percent, after imports rose 8.8 percent to ¥18.55 trillion while exports jumped 18.3 percent to a record-high ¥15.19 trillion.
Japan’s trade surplus with all of Asia, including China, expanded 19.5 percent to ¥5.86 trillion. The fourth straight year of surplus was reflected in a 13.1 percent increase in exports to ¥43.45 trillion, the largest on record, and a 12.2 percent rise in imports to ¥37.59 trillion.
A trade deficit of ¥182.72 billion was registered with the European Union as imports from the economic bloc hit ¥9.04 trillion, the ministry data showed.
The figures were measured on a customs-cleared basis.
For March alone the nation’s trade balance remained in surplus, but the increase in exports was less than expected with sales to the U.S. and EU nearly flat. Japan had a goods trade surplus of ¥797.3 billion for the month.
The unexpectedly weak growth in exports suggests that while the global economy is growing, concerns about a brewing trade war may be hurting sentiment. Trade with China recovered after a decline in February caused by the Lunar New Year holidays.
“Fears over a trade war haven’t subsided yet. The results of this are hard to foresee, and much of it is affected by the thinking of the U.S. president,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute, before the latest data was released.
“Both exports and imports should continue to do well,” Yusuke Miyairi, an economist at Nomura Securities Co., said before the release. “The trade war concerns that emerged from late March to April will only show their effects in the data two or three months from now at the earliest. Even then it’s merely concerns, so when both the U.S. and China are yet to put threats into action it’s hard to see trade clearly dropping.”