Japan: Strong yens continues to put a lid on export growth in March
April 26, 2018
Nominal yen-denominated merchandise exports increased 2.1% year-on-year in March, accelerating timidly from February’s 1.8% rise. March’s print came in below market expectations of a 5.2% increase as a strong yen continues to erode the competitiveness of Japan’s external sector. Exports in March benefited from stronger shipments of machinery, manufactured goods and electrical machinery, in that order.
In March, imports contracted for the first time in 15 months, falling 0.6% year-on-year. The print contrasted the 16.6% rise in February and market expectations of a 6.3% increase. The decline mostly reflected seasonal distortions related to the Lunar New Year holidays and was driven by lower purchases of electrical machinery and foodstuff.
As a result of the contraction in imports, the merchandise trade balance rose from a null figure in February to a JPY 797 billion surplus in March. Meanwhile, the 12-month trailing trade surplus rose to JPY 2.5 trillion in March, up from the JPY 2.3 trillion surplus recorded in the previous month.