–Imports Up on Rising Energy Prices, Leading to 7th Straight Trade Deficit
–Exports to China Rebound After Irregular Shipments Around Lunar New Year
–Auto Exports Rebound Amid Lingering Supply Constraints
By Max Sato
(MaceNews) – Japanese exports rose from a year earlier for the 12th straight month in February, picking up from slower growth in January, which was due to pre-lunar new year irregular shipments to Asia, data released Wednesday by the Ministry of Finance showed.
Costs for crude oil and natural gas that arrived in Japan in February but reflected earlier market prices continued rising from year-earlier levels, resulting in the seventh consecutive monthly trade deficit in February. The war in Ukraine has raised energy markets further, which in turn will raise Japan’s import costs more, particularly at a time when the yen is weakening against the dollar.
The negative trade balance narrowed from an unusually wide gap seen in January.
Rush shipments of goods ahead of the Feb. 1 lunar new year and suspended cargo handling and customs clearance in some Asian countries in late January during new year holidays are believed to have caused a distortion to export and import patterns for January.
The key points from the MOF’s Trade Statistics:
* Exports rose 19.1% in February for the 12th straight year-on-year rise after rising 9.6% in January and 17.5% in December. It was smaller than the median forecast of a 21.0% gain. Export volumes and values have already recovered to pre-pandemic levels, limiting the scope for a sharply bigger rise from a year before.
* The increase was led by demand for iron and steel, mineral fuels and automobiles. Overall shipments of automobiles rose 8.3% on year in February after falling a downwardly revised 1.0% in January and rising 17.6% in December. Auto exports to the US, the key market, rebounded 16.2% after slipping 0.2% in January and rising 11.9% in December. Parts supply delays have been eased but global chip shortages continue, making the outlook for automobile production and shipments uncertain.
* On a seasonally adjusted basis, exports fell 0.5% in February from the previous month after rising 0.9% in January, the MOF said. The Bank of Japan’s real export index dipped a seasonally adjusted 1.5% on month in January for the second straight drop, led by continued weakness in capital goods shipments and a slip in auto exports after a recent pickup. It followed a 1.1% fall in December and a 9.1% jump in November. The index rose 0.7% on the October-December quarter, when it fell 0.9%. The BOJ will release its real trade indexes for February at 1400 JST (0500 GMT/0100 EDT) Wednesday.
* Imports rose 34.0% on year in February for the 13th straight rise after gaining a revised 38.7% in January, coming in higher than the median forecast for a 27.0% rise. The increase was led by higher crude oil and natural gas prices as well as the need to import more Covid vaccines from Europe and the US. Import volumes posted the first drop in four months, down 0.9%, indicating the increase in import values were due largely to the uptrend in global energy markets.
* The trade balance came to a deficit of Y668.3 billion in February, marking the seventh straight month of a shortfall after a deficit of Y2.19 trillion the previous month and compared to a surplus of Y175.9 billion in February 2021. The gap was much wider than the consensus call of a Y112.6 billion deficit.
* Exports to China, the top export destination for Japan, rose 25.8% from a year earlier in February after marking a rare drop (-5.4%) in January, which was the first fall in 19 months, and rising 10.8% in December. The increase was led by higher shipments of chip-making equipment, iron and steel and plastics.
* Japanese exports to Asia as whole marked the 12th straight y/y rise, up 25.1%, after climbing 6.3% in January and 16.6% in December.
* Exports to the U.S., another key market, recorded the fifth straight year-on-year rise, up 16.0% in February, after rising 11.5% in January and 22.1% in December. The increase was led by a rebound in automobiles and continued strong demand for chip-making equipment.
* Shipments to the European Union posted the 12th straight year-on-year increase, up 8.8% on year after gaining 16.1% in January. Demand for chip-making equipment, iron and steel and optical instruments remained strong while shipments of automobiles to the region marked the second straight year-on-year decline.