Japan Trade Balance


Exports grew at fastest pace in more than one year

In March, exports rose 5.9% over the same month last year, which contrasted the 2.7% drop observed in February. Moreover, the print overshot market expectations that had exports adding a paltry 0.2% and marked, in fact, the fastest pace of expansion since February 2011, just before the devastating Tohoku earthquake. On the other hand, imports grew 10.5% (February: +9.2% year-on-year), coming in above the 7.0% rise anticipated by the market. As a result, the trade balance swung from a surplus of JPY 29.4 billion in February (USD 375 million) to a deficit of JPY 82.6 billion in March (USD 1.0 billion), which was, nevertheless, well below the JPY 223 billion shortfall expected by market analysts. The improvement in exports was broad-based, as most of the major categories posted better readings than in the previous month, particularly transport equipment. Shipments to the United States continued to build momentum, while exports to China, Japan's largest trading partner, also improved noticeably. That said, purchases of fossil fuels, which account for around a third of total imports, remained buoyant due to the need to generate electric power. Currently only one of Japan's 54 nuclear plants is in operation, but it will be shut down on 5 May for regular maintenance, thereby pushing up the energy import's bill. However, the government announced that two nuclear reactors might be restarted in the next few months.

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