–Japan Posts 19th Straight Month of Trade Deficit on High Oil, Gas Import Costs
–Exports to China Mark 3rd Straight Y/Y Drop Amid Renewed Covid Spike
By Max Sato
(MaceNews) – Japanese export values posted only modest growth in February amid slowing global demand but picked up from January, when lunar new year holidays distorted trade flows with some parts of Asia, data released Thursday by the Ministry of Finance showed.
The pace of imports was also relatively slow on softer energy markets, which led to a narrower trade deficit in February after the balance hit a record shortfall in January.
Shipments to China, the key export market for Japanese goods, posted their third straight year-over-year decline as the world’s second-largest economy has been hit by the resurgence of the pandemic since Beijing lifted its strict zero-Covid public health rules in early December.
The key points from the MOF’s Trade Statistics:
* Export values rose 6.5% on the year in February for the 24th straight rise, with the pace of increase picking up from a 3.5% gain in January but slower than 11.5% in December and 20.0% in November and a 25.3% surge to a record high ¥9.0 trillion in October. It was weaker than the median forecast of a 7.7% rise (forecasts ranged from 5.0% to 12.5% increases). The slow January figure was due to rush shipments of goods ahead of the Jan. 22 lunar new year (compared to Feb. 1 in 2022) and suspended cargo handling and customs clearance in China, Taiwan and Hong Kong during their lunar new year holidays.
* Amid slowing global economic growth, export volumes fell 7.9% on the year for the fifth straight drop after falling 11.5% in January, 7.1% in December, 3.6% in November, edging down 0.3% in October and rising 7.3% in September.
* The increase in February export values was led by the recent pickup in automobile shipments, thanks to easing global supply constraints, and solid demand for mineral fuels, all as seen in the previous month. Exports of drugs also rose but those of auto parts and plastics continued to dip.
* Import values rose 8.3% on the year in February for the 25th straight increase, coming in lower than the median forecast of a 11.7% rise. It followed increases of 17.8% in January, 20.8% in December, 30.3% in November and a 53.6% jump to record high ¥11.17 trillion in October. The increase was led by higher prices for coal, crude oil and natural gas, compared to year-earlier levels, as seen in recent months.
* Import volumes fell 7.8% on year in February for the fourth straight decrease after dipping 2.4% in January, 6.4% in December and 4.6% in November and rebounding 5.6% in October.
* The trade balance came to a deficit of ¥897.7 billion in February. It marked the 19th straight month of a shortfall, narrowing from a record high deficit of a revised ¥3,496.6 billion in January but widening for a deficit of ¥711.5 billion in February 2022. The gap was smaller than the consensus forecast of a ¥1,074.0 billion (Y1.07 trillion) deficit.
* Exports to China, one of the top export destinations for Japanese goods, fell 10.9% on the year in February after falling 17.1% in January, posting their first drop in seven months in December with a 6.2% drop and rising 3.5% in November. The decrease was led by automobiles, auto parts and semiconductor-producing equipment, as seen in the previous two months. Shipments to China rose 12.8% to a record high ¥1.78 trillion in July 2022.
* Japanese exports to Asia as whole slipped 1.3% in February after marking their first year-on-year drop in 23 months in January, down 4.0%, and rising 4.1% in December and 11.6% in November. The decrease was led by plastics, auto parts and chip-making equipment, as seen in the previous month. Exports of ships rose sharply.
* Exports to the U.S., which have exceeded exports to China since October 2022, recorded the 17th straight year-on-year rise, up 14.9% in February. The pace of increase picked up from 10.4% in January but was slower than 16.9% in December, 32.6% in November and 36.5% to a record high of ¥1.78 trillion in October. The increase was led by automobiles, drugs and construction and mining equipment.
* Shipments to the European Union posted the 24th straight year-on-year increase in February, up 18.6%, following increases of 9.5% in January and 27.0% in December, led by automobiles, motorcycles and construction and mining equipment.