Japan’s exports surge on higher global demand
Tokyo: Japanese exports recorded their biggest gain in more than two years in March, official data showed on Thursday, in a sign of optimism for the world’s third-biggest economy.
The strong result, which came in better than expected, backs up the view that Japan’s economic growth is picking up steam.
The International Monetary Fund (IMF) on Tuesday boosted its economic forecast for Japan, projecting a 1.2 per cent annual expansion this year from a January projection of 0.8 per cent. A key Bank of Japan business confidence also points to rising optimism among big manufacturers.
Prime Minister Shinzo Abe has been trying for years to rejuvenate growth and end an extended period of on-and-off deflation through a policy blitz of easy money, stimulus and reform.
Exports expanded 12.0 per cent in March to 7.2 trillion yen ($66.12 billion), the strongest expansion since January 2015 and the fourth straight monthly gain, according to the Finance Ministry.
“Japan’s production and exports are rising on the back of a global rebound in manufacturing,” said Masaki Kuwahara, senior economist at Nomura Securities Co.
“In Asia, developing nations are doing well cyclically and that’s directly helping Japan’s exports.”
Export gains were led by strong demand for auto parts and optical instruments, such as mobile phone parts and tools to make semiconductors, the ministry said.
The data comfortably beat the market’s expectation for a rise of 6.2 per cent. Imports also rose 15.8 per cent to 6.6 trillion yen, more than expected, mainly due to rising oil and coal purchases needed to fire the Japanese economy.
Japan has been less reliant on nuclear power since the March 2011 earthquake, tsunami and nuclear meltdown crisis that led to many of its atomic reactors shutting down over safety fears.
The latest figures put Japan’s trade balance at 614.7 billion yen, down 17.5 per cent from a year ago.
“The upshot is that net trade should have provided another boost to Q1 GDP growth,” said Marcel Thieliant, senior Japan economist at Capital Economics. Japan announces preliminary gross domestic product figures next month.
By regions, Japanese exports to top trade partner China rose 16.4 per cent, while imports from the Asian giant expanded 10.3 per cent.
Japan’s exports to the United States expanded 3.5 per cent, led by auto parts, but all-important vehicle shipments dropped 3.8 per cent, the ministry said, as US new auto sales begin to show signs of losing steam.
Meanwhile, Japanese Finance Minister Taro Aso said there was no quick fix for the country’s tattered finances, shrugging off the chance the central bank would resort to “helicopter money” — or direct underwriting of public debt to fund government spending.
He also said budding signs of recovery in the economy and private consumption are paving the way for Japan to proceed with a twice-delayed sales tax hike now scheduled for October 2019.
Aso said he was aware of proposals by some academics for radical steps to spur growth, such as having the Bank of Japan directly underwrite government spending or intentionally creating sharp inflation to pay off public debt without raising tax. — AFP