Econintersect: Japan’s exports continued the up trend in January 2015 that started a year ago. The value of exports grew 17% over the level in January 3014. Exports fell by 11% from December to January, which is a typical seasonal change, although less than the average over the past decade (nearly 16% drop). Imports also improved, dropping 9.0% from the same month a year ago, driven primarily by lower oil costs. Both exports and imports were much better than had been forecast. As a result there was a big improvement in the balance of trade with the trade deficit shrinking by 58% from January 2014.
The following graphs from Trading Economics show the most recent decade of trade data for Japan.
The balance of trade increased in deficit from December to January but by the smallest amount in the last decade, except for January 2010 which was similar.
Comments from Others
Misuru Obe, MarketWatch:
…export growth has been largely fueled by growth in external demand, rather than by any changes caused by Abenomics. The Bank of Japan’s export-price indicator shows most Japanese exporters are still refraining from cutting the prices of their products, opting instead to pocket fatter profits created by the cheaper currency.
Takeshi Minami, chief economist at Norinchukin Research Institute disagreed with Obe’s pricing opinion (Reuters):
The BOJ will wait to see how oil prices may impact people’s deflationary mindset, and brisk trade data will encourage Kuroda to stand pat on policy for the time being. A jump in export volume suggests that Japanese exporters who have gained hefty profits due to a weak yen are lowering exporting prices to boost shipments.
Misuru Obe, MarketWatch:
With exports rising and imports falling, some economists now expect the trade balance to turn positive as early as this spring. But others caution against premature optimism.
Ryutaro Kono, chief economist at BNP Paribas, MarketWatch:
Japan’s tight labor market means companies have little room for increasing exports. …deficits will narrow to around 1% of GDP this year [2.6% in 2014], but won’t be eliminated entirely.
Bank of Japan Governor Haruhiko Kuroda said on Wednesday he saw no need now to expand monetary stimulus as the bank raised its view on output and exports and stuck to its assessment that the world’s third largest economy is recovering moderately.
Tomo Kinoshita, chief Japan economist at Nomura (CNBC):
This is a positive result for Japanese economy. Exports will continue to support economic growth in 2015, although private investment has also started to pick up and will have an important contribution to the economy.
February’s export data may not match January’s strength. Shipments to China will likely slow this month due to the Lunar New Year holiday which falls on February 18-19.
Yen depreciation has really made Japanese products more competitive, particularly within Asia, where exports are often transacted in yen.
Moody’s Analytics note (CNBC):
The upturn in the U.S. economy, coupled with the weaker yen, is supporting export growth.
Japanese stocks were up after the data was released, pushing toward a 15-year high.
- Trade Statistics of Japan (Ministry of Finance, 19 February 2015)
- Japan exports surge, while imports sag (Misuru Obe, MarketWatch, 8 February 2015)
- Japan’s annual exports jump most since late 2013 in boost to economy (Tetsushi Kajimoto and Mari Saito, Reuters, 18 February 2015)
- Japan exports roar ahead in January, trouncing forecasts (Ansuya Harjani, CNBC, 18 February 2015)