Japan’s export sector saw a significant uptick in February, bolstered by robust shipments of automobiles and electrical machinery, as per the government’s announcement on Thursday.
According to preliminary customs data, exports for February reached 8.2 trillion yen ($55 billion), marking the third consecutive month of growth. This surge contributed to a 7.8% increase from the same period last year.
Despite the overall growth, the report also highlighted a reduction in the trade deficit, which decreased by over half compared to the previous year, amounting to 379 billion yen ($2.5 billion). This marked the second consecutive month of deficit.
The data revealed a varied pattern in export destinations. While exports to China experienced a modest 2.5% rise and those to the broader Asian region saw a 2.3% increase year-on-year, suggesting a moderation in demand, exports to the United States surged by 18%, and those to the EU witnessed a substantial uptick of nearly 16%.
Japan’s Export Sector Surges in February: Strong Growth Driven by Automobiles and Electrical Machinery Shipments (Credits: San Diego Union-Tribune)
Conversely, the import landscape displayed a mixed picture. Imports from China soared to 1.7 trillion yen ($236 billion), showing an almost 17% annual increase, which widened Japan’s deficit with its significant neighbor. However, imports only increased by 0.5% to nearly 9 trillion yen ($60 billion), influenced by declining prices of key commodities like coal and liquefied natural gas.
The positive momentum in exports comes on the heels of the Bank of Japan’s decision to raise its key interest rate for the first time in 17 years, moving away from the previously negative interest rate policy. Despite this shift, the central bank remains committed to maintaining accommodative lending conditions as it monitors various indicators for economic growth.
One encouraging development is the resurgence in tourism, considered a statistical component of exports, with recent data indicating a surpassing of pre-COVID-19 visitor numbers. It’s worth noting that Japan imposed entry restrictions during the pandemic.
Despite a slowdown in Japan’s economy, exports have shown resilience, reaching a record high of just over 100 trillion yen ($670 billion) in 2023. This places Japan as the world’s fourth-largest economy, trailing behind Germany.
