Japanese exports exceed forecasts as yen weakens
Bloomberg in Tokyo
Japan's exports exceeded estimates last month and the trade deficit narrowed from February after declines in the yen made the nation's products more competitive in overseas markets.
Overseas shipments rose 1.1 per cent from March last year, the Finance Ministry said. The median estimate of 22 economists in a survey was for a 0.2 per cent increase. The trade shortfall was 362.4 billion yen (HK$28.6 billion), against 777.5 billion yen in February.
Better-than-forecast trade numbers add to positive signs for the economy as central bank governor Haruhiko Kuroda rolls out unprecedented monetary stimulus to trigger a growth rebound.
At the same time, declines in shipments to China and the European Union highlighted limits on the likely scale of export gains this year. The United States displaced China as Japan's biggest export market for the year to March.
"The yen's weakness has been supporting Japan's exports," said Long Hanhua Wang, an economist at Royal Bank of Scotland. "We are yet to see any signs that Japan's exports are set for a full-fledged rebound."
The yen fell about 19 per cent against the US dollar in the past six months. It was trading at 98.81 yesterday afternoon.
Imports rose a less-than-forecast 5.5 per cent.
While the trade deficit narrowed from February, it was four times bigger than a year earlier. The nine consecutive monthly trade shortfalls are the longest stretch since 1980.
The yen's decline is swelling Japan's import bill as nuclear-plant shutdowns force increased buying of fossil fuels.
Japanese exports to China fell 2.5 per cent from a year earlier, while those to the European Union slid 4.7 per cent. Shipments to the US rose 7 per cent.
The Group of 20 economies will affirm a commitment to avoid weakening their currencies to gain an advantage for their exports, according to a draft statement prepared for a meeting this week in Washington.
The draft statement maintains a pledge made in February in Moscow to "move more rapidly towards more market-determined exchange rate systems and exchange-rate flexibility" and to refrain from competitive devaluations.
A first draft communique, prepared for meetings of finance ministers and central bankers, describes the global outlook as "generally somewhat weaker and uneven" with "unbalanced" recoveries between advanced economies and emerging markets.
The maintaining of the language on currencies suggests the G20 members will withhold direct criticism of Japan's efforts to rally its economy from 15 years of deflation so long as it does not seek to do so at their expense by driving the yen down.