economics

Japanese Exports Rebound in April After Weak March Reading

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Japanese exports picked up in April after lackluster data the previous month, despite friction with the U.S. and between the U.S. and China, Japan’s two biggest trading partners.

Highlights

  • The value of exports rose 7.8 percent in April from a year earlier (forecast +8.7%). 
  • Imports rose 5.9 percent (forecast +9.8%).
  • The trade balance was a 626 billion yen surplus ($5.6 billion) (forecast +440 billion yen).

Key Takeaways

The data cover the first full month after the implementation of U.S. tariffs on steel and aluminum imports in March. Trade remains vital for Japan’s economic growth and recovery, making the Trump administration’s protectionist shift problematic.

Economist Takeaways

  • Exports of autos and semiconductor-production equipment have rebounded, and that’s good because it shows a slowdown in the first quarter was temporary, said Mari Iwashita, chief market economist at Daiwa Securities Co.
  • The value of imports may increase further from here as the market digests the recent gain in oil prices, she said.
  • "We have been expecting a moderate recovery in exports but it could be better than a moderate recovery," said Takashi Shiono, an economist at Credit Suisse Group AG. The global economy continues to pick up and demand from China for machinery to produce semiconductors is one leading driver of that, he said.
  • "Weaker-than-expected exports signal that the outlook for the global economy also lacks strength," said Masaki Kuwahara, senior economist at Nomura Securities Co. "Domestic demand is also slightly weak, so it makes sense that both exports and imports are slightly weak."

Other Details

  • The main contributors to exports were U.S.-bound autos, tanker ships to the EU and semiconductor-manufacturing devices to China, finance ministry officials said at a briefing on Monday. Asked about the impact of U.S. tariffs on steel and aluminum imports, officials said that resource prices are influenced by various factors.
  • Japan’s adjusted trade balance showed a surplus of 550 billion yen (forecast +114.9 billion yen).
  • Exports to China, Japan’s largest trading partner, rose 10.9 percent in April from a year earlier.
  • Those to the U.S. grew 4.3 percent.
  • Shipments to the EU increased 14.1 percent.

— With assistance by Yuko Takeo, Toru Fujioka, and Yoshiaki Nohara

(Adds comments from economists and officials.)
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