Japan's Trade in Surplus as Imports Drop for Fifteenth Month

Photographer: Kiyoshi Ota/Bloomberg

Japan’s trade balance was in surplus in March as the stronger yen reduced the cost of energy and other imports, while exports fell.

Overseas shipments dropped 6.8 percent from a year earlier, while imports declined 14.9 percent, leaving a surplus of 755 billion yen ($6.9 billion). That was less than the 834.6 billion yen forecast in a Bloomberg survey.

Even as concern rises among Japanese policy makers that the yen’s 10 percent appreciation this year will undermine exports, the gain cuts the nation’s import bill. The average oil price declined 21 percent in March this year from the same month in 2015, cutting Japan’s fuel costs. The country depends on overseas supplies for almost all its energy, a situation worsened by the continued shutdown of most its nuclear reactors.

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The slump in Japan’s export values is weighing on companies’ revenue and “may undermine their willingness to invest and lift wages,” Marcel Thieliant, senior Japan economist for Capital Economics, said in a research note Wednesday.

The yen rose 0.2 percent to 109.03 per dollar, after retreating from a 17-month high of 107.63 reached last week. The currency’s advance this year reverses the trend that saw it drop almost 30 percent over the previous three years.

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