–Imports Back on Downtrend due to Y/Y Drop in Energy Costs After Marking 1st Rise in 11 Months in February
–Exports to China Post 4th Straight Y/Y Gain after Last Year’s Slump
–Exports to US Remain Robust; Those to EU Up for 4th Month in A Row
–Fiscal 2023 Exports Hit Fresh Record High on Improved Supply Chain, Strong US Economy
By Max Sato
(MaceNews) –Japanese export values rose 7.3% on year in March for the fourth straight increase, led by solid global demand for automobiles and Asian purchases of semiconductors while export volumes slipped, data released Wednesday by the Ministry of Finance showed. The pace of increase was faster than the consensus forecast of a 5.8% gain but was slightly slower than the 7.8% rise in February.
Import values dipped 4.9% (consensus was a 7.2% drop) after posting the first year-over-year increase in 11 months with a slight 0.5% rise in February and falling 9.8% in January. The decrease was led by coal and liquefied natural gas due to their soft prices as well as lower demand for non-ferrous metals whose prices have risen in recent months. There was what appears to be a temporary jump in aircraft purchases in March.
The trade balance recorded a ¥366.5 billion surplus after showing a revised ¥377.8 billion deficit in February. It was the first positive figure since a ¥58.9 billion surplus seen in December and compared with a ¥750.9 billion deficit in March 2023 and a record shortfall of ¥3,506.43 billion (¥3.51 trillion) hit in January 2023.
Shipments to China, one of the key export markets for Japanese goods, posted their fourth straight increase after a year-long decline through November last year amid a gradual recovery in the world’s second-largest economy. In its quarterly update to its outlook released this week, the International Monetary Fund left its forecast for China’s GDP growth unchanged at 4.6% in 2024, slowing from 5.2% in 2023.
Japanese exports to the European Union also posted the fourth consecutive gain after showing their first year-over-year drop in 33 months (nearly flat) in November while exports to the U.S. remain robust, up for the 30th straight month, after hitting a record high amount in December 2023.
Other details from the MOF’s Trade Statistics:
* Export volumes fell 2.1% on year in March for the second straight drop after falling 1.5% in February while import volumes slipped 9.4% after rising 1.5% for the first increase in 16 months the previous month.
* In fiscal 2023 that ended last month, exports rose 3.7% to a fresh record high of ¥102.9 trillion, led by demand for automobiles and auto parts on improved global supply as well as for construction and mining equipment thanks to strong U.S. economic growth. It was the third straight annual increase after rising 15.5% to ¥99.22 trillion (the previous record), climbing 23.6% in fiscal 2021 and falling 8.4% in fiscal 2020. Imports fell 10.3% to ¥108.8 trillion amid lower prices for coal, liquefied natural gas and crude oil after surging 32.5% to a record ¥121.28 trillion in fiscal 2022, rising 33.7% in fiscal 2021 and falling 11.3% in fiscal 2020.
* The fiscal 2023 trade balance was a deficit of ¥5.89 trillion after recording a record annual shortfall of ¥22.06 trillion in fiscal 2022, when a spike in energy and commodities markets and the depreciation of the yen pushed up import costs. It followed a deficit of ¥5.67 trillion in fiscal 2021, a ¥998.6 billion surplus in fiscal 2020.
* Exports to China, one of the top export destinations for Japanese goods, rose 12.6% on year in March (partly in reaction to a 7.7% drop in March 2023) after rising 2.5% in February, surging 29.2% in January and rebounding 9.5% in December. The increase was led by shipments of semiconductor-producing equipment, plastics and automobiles, as seen in the previous month.
* Japanese exports to Asia as a whole also rose for the fourth consecutive month, up 6.6% in March, after posting a modest 2.3% rise in February and climbing 13.5% in January and marking the first rise in 12 months in December with a 3.0% gain. The increase was led by solid demand for semiconductor-producing equipment, plastics and semiconductors.
* Exports to the U.S., which have exceeded those to China since October 2022, recorded their 30th straight year-over-year rise, up 8.5% in March, after rising
18.4% in February and 15.6% in January and soaring 20.2% to a record high of ¥2.08 trillion in December. The increase was led by automobiles and auto parts as well as construction and mining equipment as seen in the prior month.
* Shipments to the European Union rose 3.0% in March for the fourth consecutive increase after rising 14.6% in February. The increase reflects solid demand for pumps/centrifuges, drugs and heavy electrical machinery.