Japan August exports jump 18% in biggest gain in almost four years

Newly manufactured vehicles await export at a port in Yokohama, Japan, on Jan 16, 2017.
Newly manufactured vehicles await export at a port in Yokohama, Japan, on Jan 16, 2017. PHOTO: REUTERS

TOKYO (BLOOMBERG) - Japanese exports and imports surged in August, with both beating expectations as a recovery in trade appeared to gain momentum.

Exports rose 18.1 per cent from a year earlier, the biggest increase since November 2013. Imports climbed 15.2 per cent. The trade surplus was 113.6 billion yen (S$1.37 billion).

Shipments of autos to the US increased 28.3 per cent, though part of the increase in overall shipments to the US can be attributed to lower exports the previous year, according to the Ministry of Finance. Shipments of electronic parts to Asia rose 21.6 per cent.

Japan has enjoyed a run of strong growth in exports this year, while rising imports add to signs that domestic demand is firming as well. The Japanese economy grew at an annualized 2.5 per cent in the second quarter, more than double its potential growth rate. But while a weaker yen has improved trade data, inflation remains well below the Bank of Japan's 2 per cent target.

"In a word, the trade data is strong," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute. "Imports are strong, but exports were stronger, and this is definitely a positive reading."

"The actual content of the data is better than the headline balance number," Shinke said. "Autos and semiconductors are leading the export growth."

"In the third quarter, we will see a trend reversal in the Japanese economy," said Hiroaki Muto, chief economist at Tokai Tokyo Research Center. "External demand will be strong and consumption will lack momentum."

Exports to China, Japan's largest trading partner, rose 25.8 per cent from a year earlier.

Shipments to the US increased 21.8 per cent. Those to the EU climbed 13.7 per cent.