Japan February exports jump most in two years, led by sales to China

Containers at an industrial port in Yokohama, Japan.
Containers at an industrial port in Yokohama, Japan.PHOTO: REUTERS

TOKYO (BLOOMBERG) - Japan's exports rose the most in two years in February, after a lull in January that was due to the Lunar New Year celebrations in Asian trading partners.

Exports rose 11.3 per cent from a year earlier, higher than the median Bloomberg-polled analyst estimate of 10.1 per cent.

Imports increased 1.2 per cent, compared to the estimate of 1.3 per cent.

The trade surplus for February was 813.4 billion yen (S$10.21 billion), compared with an estimate of 807.2 billion yen.

Strengthening global demand for Japan's exports has underpinned moderate growth in the economy in recent quarters. Yet international trade is at risk from rising protectionist sentiment.

Under pressure from the US, the Group of 20 dropped a pledge to "avoid all forms of protectionism" in their communique following a meeting of its finance chiefs and central bank governors this past weekend.

Prime Minister Shinzo Abe has become increasingly vocal about the importance of free trade, warning of a trend toward "protectionism and navel-gazing."

Taken together with January's weak figure, "the recovery trend appeared to remain intact," Yuichiro Nagai and Yukito Funakubo of Barclays wrote in a note before the data were released.

Major restrictions on trade from the US and elsewhere would be worrying for Japan but remain unrealistic, Takuji Okubo, chief economist and principal at Japan Macro Advisors, said before the release.

"I think this talk about the rise of protectionism, I think there's a lot of hot air. For now there's no obvious threat to the global economy, so I think it's reasonable to expect moderate growth in global trade," Okubo said, adding that any stimulative measures from the Trump administration could further boost trade.

Exports to the US rose 0.4 per cent from a year earlier. Shipments to the EU rose 3.3 per cent.

Exports to China, Japan's largest trading partner, jumped 28 per cent.