–Imports Also at Record High on Energy, Leading to 8th Straight Trade Deficit
–Exports to China Slower in March, Volumes Down on Year
–Auto Exports Slip in March After February Rebound Amid Supply Bottlenecks
By Max Sato
(MaceNews) – Japanese exports hit a record high in March, marking the 13th straight year-on-year increase, on reopening demand for semiconductor-producing equipment and iron and steel, particularly from Asia, but export volumes dipped amid slowing Chinese economic growth, data released Wednesday by the Ministry of Finance showed.
Oil and gas prices remained well above year-earlier levels, boosting imports to a record high in March and resulting in the eighth consecutive trade deficit in March. The depreciation of the yen, reflecting the widening US-Japan interest rate gap, is also making imports more expensive.
Exports to the world rebounded sharply to a record amount in fiscal 2021 that ended last month, for the first rise in three years, but imports also hit a record high, rising at a faster pace and pushing the trade balance back into a deficit after a surplus in fiscal 2020.
The key points from the MOF’s Trade Statistics:
* Exports rose 14.7% to a record high of Y8.46 trillion in March for the 13th straight year-on-year rise after rising 19.1% in February, 9.6% in January and 17.5% in December. The pace was slower than the median forecast of a 17.5% gain. Export volumes fell 1.5% for the first drop in two months after rising 2.7% in February and falling 4.0% in January.
* The increase was led by demand for chip-making equipment, iron and steel, as well as mineral fuels. Shipments of automobiles fell 5.2% (down 14.4% in volumes) on the year in March as the industry faced continued supply constraints,
after rebounding 8.3% in February, falling 1.0% in January and rising 17.6% in December. Auto exports to the US, the key market, dipped 16.7% (down 26.3% in volumes) after rising 16.2% in February, slipping 0.2% in January and rising 11.9% in December.
* On a seasonally adjusted basis, exports rose 1.7% in March from the previous month after falling 0.4% in February, the MOF said. The Bank of Japan’s real export index rebounded a seasonally adjusted 3.8% on the month in February for the first rise in three months, led by capital and intermediate goods. It followed a revised 1.7% fall in January, a 1.1% drop in December and a 9.1% gain in November. The BOJ will release its real trade indexes for March at 1400 JST (0500 GMT/0100 EDT) Wednesday.
* Imports rose 31.2% on year to a record high Y8.87 trillion in March for the 14th straight increase after a revised 34.1% rise in February, coming in faster than the median forecast for a 28.9% rise. The increase was led by higher prices for crude oil, coal and natural gas as well as the need to import more Covid vaccines from Europe and the US. Import volumes were flat on year (+0.0%) after falling 0.9%, indicating the increase in import values was due largely to rising global energy prices.
* The trade balance came to a deficit of Y412.4 billion in March, marking the eighth straight month of a shortfall after a deficit of Y669.7 trillion (revised from Y668.3 billion) the previous month and compared to a surplus of Y615.6 billion in March 2021. The gap was much wider than the consensus call of a Y100.8 billion deficit.
* For fiscal 2021 that ended in March, exports jumped 23.6% to a record Y85.88 trillion, posting the first gain in three years, led by iron and steel, automobiles and equipment to produce semiconductors. Exports fell 8.4% in fiscal 2020 and 6.0% in fiscal 2019 and rose 1.9% in fiscal 2018. Imports also soared 33.3% to a record Y91.25 trillion largely on rising energy prices, also the first rise in three years, following decreases of 11.3% in fiscal 2020 and 6.3% in fiscal 2019 and a 7.2% rise in fiscal 2018. Japan marked a trade deficit of Y5.37 trillion in the last fiscal year after a Y1.02 trillion surplus in fiscal 2020 and a Y1.29 trillion deficit in fiscal 2019.
* Exports to China, the top export destination for Japan, edged up 2.9% from a year earlier in March (volumes fell 13.0%) after surging 25.8%, slipping 5.4% in January (the first drop in 19 months) and rising 10.8% in December. The increase was led by higher shipments of audio and visual equipment, iron and steel and electrical power machinery. Exports of power generating machines and nonferrous metals dropped.
* Japanese exports to Asia as whole marked the 13th straight y/y rise, up 12.4%, after increases of 25.1% in February, 6.3% in January and 16.6% in December. The increase was led by iron and steel, chip-making equipment and semiconductors.
* Exports to the U.S., another key market, recorded the sixth straight year-on-year rise, up 23.8% in March, after rising 16.0% in February, 11.5% in January and 22.1% in December. The increase was led by power generating machines, auto parts and drugs while car exports slipped back.
* Shipments to the European Union posted the 13th straight year-on-year increase, up 16.8% on year after gaining 8.8% in February and 16.1% in January. Demand for chip-making equipment remained strong and the increase was also led by ships and organic compounds. Shipments of automobiles to the region marked the third straight year-on-year decline.