–Japan Posts 20th Straight Month of Trade Deficit on High Energy Import Costs
–Exports to China Mark 4th Straight Y/Y Drop Amid Reopening Since Zero-Covid Policy Lifted in December
–Fiscal 2022 Trade Deficit Record High Due to Spike in Energy Prices, Weak Yen
By Max Sato
(MaceNews) – Japanese export values rose on the year at a slower pace in March amid softer global demand even though trade flows appeared to have returned to normal after January’s lunar new year holiday shutdowns in some parts of Asia, data released Thursday by the Ministry of Finance showed.
The pace of imports also decelerated, leading to a narrower trade deficit for the second straight month after hitting a record shortfall in January.
Shipments to China, the key export market for Japanese goods, posted their fourth straight year-over-year decline in March, led by declines in autos and auto parts as well as iron and steel. The world’s second-largest economy is gradually recovering from the sluggish activity caused by Beijing’s strict zero-Covid policy.
The key points from the MOF’s Trade Statistics:
* Export values rose 4.3% on the year in March for the 25th straight rise, with the pace of increase decelerating from 6.5% in February but up from 3.5% in January. Exports surged 25.3% in October 2022 to a record high ¥9.0 trillion. The latest figure was higher than the median forecast of a 2.4% rise (forecasts ranged from 1.0% to 8.8% 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 8.1% on the year for the sixth straight drop after falling 7.9% in February.
* The increase in March export values was led by the recent pickup in automobile shipments, thanks to easing global supply constraints, and solid demand for semiconductor-producing equipment and non-ferrous metals. Exports of auto parts and plastics continued to dip.
* Import values rose 7.3% on the year in March for the 26th straight increase, coming in lower than the median forecast of a 12.1% rise. It followed increases of 8.3% in February, 17.8% in January and a 53.6% jump to a record high ¥11.17 trillion in October last year. The increase was led by higher prices for coal, crude oil and refined petroleum products, compared to year-earlier levels. Imports of drugs and non-ferrous metals fell sharply.
* Import volumes dropped 2.6% on year in March for the fifth straight decrease after dipping 7.8% in January.
* The trade balance came to a deficit of ¥754.5 billion in March. It marked the 20th straight month of a shortfall, narrowing further from a revised deficit of ¥898.1 billion in February and a record high deficit of ¥3,506.4 billion in January, and compared to a surplus of ¥609.8 billion in February 2022. The gap was much narrower than the consensus forecast of a ¥1.298.9 billion deficit (¥1.3 trillion).
* In fiscal 2022 that ended last month, exports rose 15.5% to a record ¥8.82 trillion for the second straight annual increase after rising 23.6% in fiscal 2021, falling 8.4% in fiscal 2020 and dipping 6.0% in fiscal 2019. Imports surged 32.2% to a record ¥9.58 trillion, also for the straight annual rise, after rising 33.5% in fiscal 2021, falling 11.3% in fiscal 2020 and slipping 6.3% in fiscal 2019.
* The fiscal 2022 trade deficit hit a record high of ¥21.73 trillion, reflecting last year’s spike in energy and commodities markets as well as the depreciation of the yen that eroded Japan’s purchasing power. It followed a deficit of ¥5.59 trillion in fiscal 2021, a ¥998.6 billion surplus in fiscal 2020 and a ¥1.29 trillion deficit in fiscal 2019.
* Exports to China, one of the top export destinations for Japanese goods, fell 7.7% on the year in March after falling 10.9% in February and posting their first drop in seven months in December with a 6.2% drop. The decrease was led by automobiles, auto parts and iron and steel while exports of semiconductor-producing equipment rebounded in March. Shipments to China rose 12.8% to a record high ¥1.78 trillion in July 2022.
* Japanese exports to Asia as whole dipped 1.1% in March after slipping 1.3% in February and marking their first year-on-year drop in 23 months in January, down 4.0%. The decrease was led by plastics and iron and steel.
* Exports to the U.S., which have exceeded those to China since October 2022, recorded the 18th straight year-on-year rise, up 9.4% in March, following a 14.9% increase in February and a 36.5% surge to a record high of ¥1.78 trillion in October 2022. The increase was led by automobiles, semiconductor-producing equipment and construction and mining equipment.
* Shipments to the European Union posted the 25th straight year-on-year increase in March, up 5.1%, following increases of 18.6% in February and 9.5% in January, led by automobiles, motorcycles and construction and iron and steel.