Japan: Exports Up, Imports Up More

Econintersect: Preliminary data for March from the Japanese finance ministry showed exports increase both year-over-year (1.1%) and month-over-month (19%).  The data was significantly stronger than had been estimated by Bloomberg.  However, the country’s balance of trade remained negative due to increased imports, primarily due to increased energy imports.  After decades of trade surpluses, Japan has now had nine consecutive months of trade deficits and 15 of the last 17 months.

For the first time in more than four years March saw more exports to the U.S. (¥11.3 trillion) than to China (¥11.2 trillion).  Exports to China fell 2.5% year-over-year and shipments to the U.S. rose 7%.

Observers attributed the higher export numbers more to the weakening yen than to an increase in amount of goods shipped.  From Bloomberg, quoting Long Hanhua Wang, an economist at Royal Bank of Scotland Group Plc in Tokyo:

“The yen’s weakness has been supporting Japan’s exports.  We are yet to see any signs that Japan’s exports are set for a full-fledged rebound.”

According to Reuters, the weaker yen has thus far impacted the currency value of imports more than exports.  Quoting Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo:

“The broad picture remains intact as the weaker yen is having more of an impact on boosting imports than exports, while the recovery in the world economy, particularly China, is tepid.

“We’ll need to wait at least until around summer before the weaker yen enhances price competitiveness of Japanese products abroad to boost exports.”

From Trading Economics:

Exports in Japan increased to 6271.36 Billion JPY in March of 2013 from 5284 Billion JPY in February of 2013. Exports in Japan is reported by the Ministry of Finance Japan. Historically, from 1979 until 2013, Japan Exports averaged 4043.36 Billion JPY reaching an all time high of 7681.69 Billion JPY in March of 2008 and a record low of 1192.54 Billion JPY in January of 1979.

Click on graphs below for larger images.

The balance of trade summary from Trading Economics:

Japan recorded a trade deficit of 362.41 Billion JPY in March of 2013. Balance of Trade in Japan is reported by the Ministry of Finance Japan. Historically, from 1979 until 2013, Japan Balance of Trade averaged 616.60 Billion JPY reaching an all time high of 1608.68 Billion JPY in September of 2007 and a record low of -1629.44 Billion JPY in January of 2013. Exports of high technology products, processed from imported raw materials, have been the main driver of Japan’s economic growth since 1960. However, since 2008, trade surplus has been deteriorating due to weaker demand and higher imports of energy.

Click on graphs below for larger images.

John Lounsbury

Sources:

• US demand shrinks Japan trade deficit (Ben McLannahan, Financial Times, 18 April 2013)

• Japan March Exports Exceed Analyst Estimates After Yen Slide (James Mayger and Keiko Ujikane, Bloomberg, 17 April 2013)

• UPDATE 1-Japan exports rise as weak yen helps; business mood up (Reuters, 17 April 2013)

• Japan Exports (Trading Economics, 18 April 2013)

• Japan Balance of Trade (Trading Economics, 18 April 2013)

• Trade Statistics of Japan (Ministry of Finance)