Photographer: Akio Kon/Bloomberg

Japan Has Trade Surplus for 3rd Month as Imports Fall

  • Corrects figure for trade balance in third bullet point
  • Weaker yen is set to help exporters in coming months

Japan posted a trade surplus for a third straight month in November as imports continued to fall faster than exports. Export values declined at the slowest pace since September 2015, with exports to China rising for the first time since February.

Key Points

  • Exports fell 0.4 percent in November from a year earlier (forecast -2.3%), after declining 10 percent in October, according to finance ministry data released on Monday.
  • Imports declined 8.8 percent (forecast -12%), following a 17 percent drop the previous month.
  • Japan had a trade surplus of 152.5 billion yen ($1.3 billion) in November.
  • The seasonally adjusted trade balance was a surplus of 536.1 billion yen.

Big Picture

The results were released as the Bank of Japan begins a two-day monetary policy board meeting. The yen has weakened more than 10 percent against the dollar since Donald Trump’s election, raising the value of Japanese exports in dollar terms and improving prospects for corporate earnings. Net overseas shipments, which subtract imports from exports, was the biggest contributor to third-quarter economic growth. Confidence among large manufacturers has improved for the first time since June last year, according to the BOJ Tankan survey released this month.

Economist Takeaways

  • “The weakening yen and expectations of a pick-up in the U.S. economy are providing a tailwind for Japanese exports," said Junko Nishioka, chief economist for Japan at Sumitomo Mitsui Banking Corp. in Tokyo.
  • "The manufacturing sector is picking up globally, with a recovery in electronics parts and automobiles," she said, noting that export volumes to the U.S., European Union and China rose.
  • "Japan’s exports are recovering and this trend is likely to continue," said Kengo Tanahashi, economist at Nomura Securities Co. in Tokyo., adding that domestic demand remains fragile.

The Details

  • Exports to the U.S. dropped 1.8 percent in November from a year earlier.
  • Shipments to the EU fell 2.2 percent.
  • Exports to China, Japan’s largest trading partner, gained 4.4 percent.
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