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Wednesday April 25, 10:23 AM
Japan's trade surplus up sharply, exports firmBy Yoko Nishikawa
TOKYO, April 25 (Reuters) - Japan's trade surplus jumped in March from a year earlier, exceeding market forecasts, as exports climbed to a record high despite a slowdown in the U.S. economy, government data showed on Wednesday. Slowing import growth was also behind the sharp expansion in the surplus, largely because of falling crude oil prices and a fall in imports of clothing from China.
"Exports are strong despite a slowdown in the U.S. economy, which shows that Japan's economy continues to get solid support from external demand," said Noriaki Haseyama, an economist at Dai-ichi Life Research Institute. "Judging from the data, external demand is likely to have contributed slightly to overall economic growth in the January-March quarter," he said. Exports, which account for around 15 percent of Japan's economic activity, grew 10.2 percent from a year earlier to a record 7.51 trillion yen, thanks to rising shipments of automobiles and semiconductors. That matched economists' median forecast of a 10.1 percent rise. Exports to the United States, Japan's largest export destination, grew 2.4 percent from a year earlier, rising for the 26th straight month. Financial markets showed a limited reaction to the data. Japan's economy, the world's second-largest, is growing steadily but economists expect growth to slow in January-March. A Reuters poll showed last week that Japan's economy is expected to have grown 0.4 percent in the first three months of this year, down from 1.3 percent growth in October-December. But now with strong exports in March, some economists say Japan's gross domestic product for January-March, due out on May 17, may have grown firmly. U.S. SLOWDOWN IMPACT LIMITED Some economists have been wary that a slowdown in the U.S. economy, which is still largely limited to a housing sector correction, could dent U.S. demand for Japanese goods. But others say the cross-border spillover from a slower U.S. economy is limited and Japanese exports will remain firm due to steady demand in Asia and Europe. Hiroshi Shiraishi, economist at Lehman Brothers Japan, noted exports to the United States fell 4 percent in March in volume terms from a year earlier. "But exports to the rest of Asia seem to be holding up reasonably well," Shiraishi said. "In the first quarter, export volumes to the rest of Asia picked up, so while the U.S. economy seems to be slowing and having some impact on Japanese exporters, thanks to the exchange rate and the global economy holding up, I think the impact from the U.S. slowdown seems to be mitigated," he added. Exports to China, now Japan's biggest trading partner, climbed 15.1 percent to 1.12 trillion yen, while imports from Japan's neighbour declined as the impact of the Chinese New Year in February appeared in March. As a result, Japan recorded a trade surplus with China for the first time in three years. A weak yen may have given a boost to exports. The average dollar/yen rate for March was 118.49 yen, compared with 117.45 yen in March last year. Imports in March were flat from the year before at 5.88 trillion yen, against a market consensus of a 4.5 percent increase, as imports of clothing mainly from China and energy products fell. The value of crude oil imports fell 5.4 percent, reflecting a downturn in crude oil prices. On a seasonally adjusted basis, the overall trade surplus increased 79.1 percent from the previous month to 1.123 trillion yen, the data showed.
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