Japan's February exports up, driven by autos

Japan's Nagoya port. Latest trade data highlights an economic recovery in Japan led by overseas demand.
Japan's Nagoya port. Latest trade data highlights an economic recovery in Japan led by overseas demand.PHOTO: BLOOMBERG

TOKYO • Japan's exports grew the most in more than two years in February, rebounding from a Chinese New Year slowdown in January, as a widening trade surplus with the US potentially raises tensions in the face of rising protectionism from Washington.

Annual export growth of 11.3 per cent topped a 10.6 per cent increase expected by economists and followed a 1.3 per cent gain in January, marking the biggest gain since January 2015, Ministry of Finance data showed yesterday.

Exports to the United States rose 0.4 per cent in February from a year ago, largely from bigger shipments of cars and auto parts.

Any rise in Japan's trade surplus with the US could be a cause of concern for Japanese policymakers, given that President Donald Trump has singled out Japan, China and Germany for their high net exports to the American market.

"There's a concern that President Trump's protectionism could cause global trade to falter," said Mr Takeshi Minami, chief economist at Norinchukin Research Institute.

  • 11.3% Japan's annual export growth in February.

    0.4% Rise in exports to the US in February, from a year ago.

Japan and the US will start a high-level economic dialogue in mid-April, with Tokyo seeking ways to avoid trade friction on issues such as car exports by proposing an agenda focused on investment in US infrastructure.

The trade data highlighted an economic recovery led by overseas demand although the rebound from a Chinese New Year slowdown in China and other parts of Asia in January played a large part.

Exports to China, Japan's largest trading partner, rose 28.2 per cent year on year in February, accelerating from a 3.1 per cent gain in the previous month - on the back of demand for auto parts and electronics components.

This helped Japan log a surplus of 111.8 billion yen (S$1.4 billion) with China - its first in five years. Overall, Japan's seasonally adjusted trade surplus stood at 680.3 billion yen, the highest since April 2010.

Analysts said February's 8.3 per cent growth in the volume of exports, and average export volume growth of around 4 per cent in January, was a positive sign for the export-reliant economy this quarter.

"Year-on-year exports to Asia were extremely strong, but those to the US and EU didn't grow very much," said senior economist Masaki Kuwahara at Nomura Securities. "If exports as a whole are growing, it's good for the economy, but if numbers for the US and EU are weak, I worry about its sustainability."

Japan has been struggling to reverse a years-long deflationary spiral of falling prices and lacklustre growth. The country had slipped into a long spell of trade deficits after the 2011 Fukushima nuclear disaster prompted a move to thermal power generation and pricey fossil fuel imports.

Falling oil prices have taken pressure off Japan's trade balance, and exports are seen as a bright light for the world's No. 3 economy.


A version of this article appeared in the print edition of The Straits Times on March 23, 2017, with the headline 'Japan's February exports up, driven by autos'. Subscribe