Japan last year posted its first trade surplus in six years thanks to a rebound in exports late in the year and persisting low oil prices, although uncertainties over US policy and global growth are overshadowing the recovery.
The ￥4.1 trillion yen (US$36.12 billion) surplus last year compared with a ￥2.8 trillion deficit in 2015, the government reported yesterday.
Exports fell 7.4 percent year-on-year to ￥70.04 trillion, while imports dropped 16 percent to ￥66 trillion, the report showed.
However, last month’s data showed a strong rebound in exports to China and some other Asian nations, suggestion a recent uptick in growth in Asia’s biggest economy is filtering through supply chains across the region.
For the whole of last year, Japan’s trade surplus with the US fell nearly 5 percent, to ￥6.8 trillion. Exports fell 7.1 percent annually to ￥14.1 trillion and imports dropped 7.3 percent to ￥7.3 trillion, the report said.
Japan ran a ￥4.6 trillion deficit with China, its largest trading partner, down by a quarter from 2015’s figure.
US President Donald Trump’s decision to drop out of the Trans-Pacific Partnership (TPP) trade pact, and his comments on imposing “border taxes” on some imports has added to uncertainties over US trade policy.
“The sustainability of external demand remains the key for the Japan’s export recovery, because of emerging protectionism and uncertainties in the US trade policy, given President Donald Trump’s repeated concerns about Japan’s auto exports and trade surplus with the US,’’ Harumi Taguchi, principal economist at IHS Global Insight, said in a note.
A Japanese government spokesman yesterday said that Tokyo was discussing how to handle future trade negotiations such as the TPP and another Asian trade pact involving China, the Regional Comprehensive Economic Partnership.
Asked about reports Japan plans to set up a new agency to handle trade talks, Japanese Deputy Chief Cabinet Secretary Koichi Hagiuda said no decision had been made yet, but “there’s no denying that this is one of the options we’re considering.”
Past trade friction with the US over auto exports had largely eased after Japanese automakers expanded investments in US factories. Japan’s vehicle exports to the US rose a scant 0.6 percent last year, measured in terms of yen, but the number of vehicles shipped rose 7.7 percent to 1.75 million.
Globally, Japan’s vehicle exports fell 6 percent by value and 0.7 percent by volume, to 5.8 million units. Exports of most other products fell, suggesting only a tepid recovery in demand.
Japan’s trade balance slipped into deficit after the 2011 earthquake and tsunami triggered meltdowns at the Fukushima Dai-Ichi nuclear plant and the country’s reactors were shut down for safety checks.
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