US demand shrinks Japan trade deficit to narrowest in nine months
Japan's March deficit was Y362bn, or about US$3.7bn
US topples China as number one export destination
Japan has posted its narrowest trade deficit for nine months, helped by a big rise in the value of shipments to the US, which has toppled China as Japan’s number one export destination.
Provisional figures released on Thursday by Japan’s finance ministry showed that overall exports rose 1.1 per cent in March from a year earlier to Y6.3tn ($64bn), while imports – boosted by fuel to replace idled nuclear capacity – were up 5.5 per cent to Y6.6tn.
The resulting Y362bn deficit was the smallest since a small surplus recorded last June, on an unadjusted basis.
Figures for the full fiscal year to the end of March, also published on Thursday, showed that Japan’s exports to China fell 9 per cent to Y11.3tn, while exports to the US rose 10 per cent to Y11.4tn. The data suggest Japan’s revival under a new prime minister will rely more on the outlook in the US than in China, which helped Japan’s export-dependent economy through the difficult post-Lehman period.
Trade between Asia’s two largest economies has been knocked by the slowdown in China and also by the effects of a diplomatic dispute between Tokyo and Beijing over a chain of islands in the East China Sea.
Meanwhile, data for March showed a revival in big-ticket orders from the US. Shipments of transport equipment and machinery accounted for 2.1 and 3.3 percentage points of the 7 per cent year-on-year increase, respectively.
The US surrendered its position as Japan’s top destination for exports early in 2009, following China’s aggressive fiscal stimulus amid the global financial crisis. Monthly shipments to the US have exceeded those to China since then, but mainly during January and February, when trade patterns are distorted by New-Year holidays in China.
Japan’s overall trade deficit stood at Y8.2tn for the fiscal year ended in March, the widest since records began. The nation’s trade balance slipped into deficit in March 2011, following the huge earthquake that ruptured supply chains and triggered the closure of almost all of Japan’s nuclear reactors. The Y922bn deficit recorded in March, on a seasonally-adjusted basis, was the 25th in a row since then.