Japan: Exports dive in April, reflecting extent of earthquake?s impact
May 25, 2011
Figures from April show that the effect of the Tohoku quake was more severe than initially expected, as exports plunged for a second month in a row, while imports surged to compensate domestic supply gaps and boost energy supply. Exports in April tumbled 12.5% over the same month the previous year (March: -2.3% year-on-year), which was in line with market expectations of a 12.4% decline. On the other hand, imports climbed 8.9%, undershooting the 11.9% growth tallied in the previous month and the 12.3% rise anticipated by the markets. As a result, the trade balance swung to a negative reading of JPY 464 billion (USD 5.6 billion), recording the first deficit for the month of April in 31 years. Motor vehicle exports, which account for around 10% of total shipments, led the contraction, falling 67.0% over the same month last year, following on the already strong 27.8% drop tallied in March. A monthly analysis corroborates the sharp decline, as exports contracted a seasonally adjusted 5.45% over the previous month, which followed on a revised 8.32% drop tallied in March. Meanwhile, imports added 3.78% over the previous month (March: -1.27% month-on-month). Furthermore, although the moving 3-month sum in exports rose from JPY 16.4 trillion in March to JPY 16.6 trillion in April due to a base effect related to the Chinese New Year, the sum remains well below the pre-crisis peak of JPY 22.2 trillion registered in December 2007. Analysts expect the trade balance to remain negative in the coming months as exports will continue to experience downside effects related to supply-chain disruptions, whereas imports will rise to substitute domestic products and meet energy shortfalls in nuclear power plants.