Business / Economy

Japanese trade rebounds with ¥721 billion surplus in June

AFP-JIJI, Kyodo

Japan logged a ¥721.4 billion ($6.4 billion) trade surplus in June, rebounding from a deficit the previous month, official data showed Thursday.

Finance ministry data showed the surplus jumped 66.5 percent from the previous year as exports rose despite international trade tensions.

The jump was driven by growing exports of power generating equipment including turbines for power plants and airplanes, as well as electronic parts and auto parts.

The figures come amid worries over U.S. President Donald Trump’s protectionist trade policies and just days after Japan and the European Union signed a sweeping free trade deal in a “clear message” against protectionism.

Exports rose 6.7 percent while imports edged up 2.5 percent, according to the data.

Japan also logged a surplus in its politically sensitive trade balance with the United States, which grew 0.5 percent from a year earlier after logging a deficit in May. The surge was led by exports of mineral fuels — including aviation fuel — though exports of cars and semiconductor equipment slipped.

Japan has been hit with U.S. tariffs on aluminium and steel exports, which Washington has imposed on allies and rivals alike.

Marking a departure from a decades-long, U.S.-led drive for open and free trade, President Trump has claimed that massive flows of imports to the United States threaten national security.

In the meantime, Japan’s deficit with China, its biggest trading partner, shrank 68.4 percent as exports grew by 11.1 percent.

But Koya Miyamae, an economist at SMBC Nikko Securities Inc., said the escalating trade war between the United States and China is likely to have detrimental effects on Japan’s trade balance down the line.

“There will be downward pressure on Japanese exports of capital goods to China,” he said. “While Japanese products could benefit from becoming more cost-competitive, exports are unlikely to grow quickly because it takes time and money to shift production.”