Japan extended a string of trade deficits last month, as the country’s import costs rose on the weak yen, but shipments to the US and China soared, official data showed yesterday.
The strong export data — up 10.1 percent over last year — comes after earlier figures showed the world’s third-largest economy grew faster than expected in the first quarter, as Japanese Prime Minister Shinzo Abe continues efforts to stoke growth.
The yen’s sharp drop since late last year makes Japanese exporters more competitive overseas and inflates the value of their repatriated overseas earnings.
The trade data is a key signal for economists who have been trying to pin down whether “Abenomics” — a program of big government spending and aggressive monetary easing — is rippling through the economy.
“This [export data] shows Japanese companies are increasingly in better shape,” RBS Securities Japan chief economist Junko Nishioka told Dow Jones Newswires. “Their profitability is also rising these days, meaning they are becoming more resilient to potential external shocks.”
The Japanese Ministry of Finance data released yesterday showed that Japan’s trade deficit expanded 9.5 percent from a year earlier to ￥993.9 billion (US$10.4 billion), the eleventh consecutive shortfall and the longest string of monthly deficits in three decades.
Exports rose 10.1 percent to ￥5.76 trillion, growing for the third straight month on higher shipments to the US and China. Exports to recession-hit Europe remained weak, falling 4.9 percent.
Imports also climbed 10.0 percent, the seventh consecutive month of increases, as the cost of fuel and other items jumped due to the weaker yen.
However, a return to trade surplus could be some way off, Daiwa Institute of Research economist Masahiko Hashimoto said.
“It will be quite difficult to return to surplus,” Hashimoto said. “Import volumes will stay high due to fuel demand. That situation would not change drastically unless nuclear power plants resume operations.”
Tokyo stocks closed 1.83 percent higher yesterday, after the official data was released. The benchmark Nikkei 225 Stock Average jumped 237.94 points to 13,245.22, while the TOPIX of all first-section shares rose 1.86 percent, or 20.17 points, to 1,106.57.