October saw Japan first trade surplus goods in four months
For the first time in four months in October, Japan posted a goods trade surplus after a dive in imports in the middle of dropping crude oil and other commodity prices more than reversed a decline in exports; government data showed Wednesday.
The goods trade surplus in the country stood at 17.27 billion yen ($159 million), marking a turnaround from a revised September deficit of 124.82 billion yen, according to a preliminary report from the Ministry of Finance.
Exports plummeted from a year ago to 6.58 trillion yen in the reporting month, representing the 11th straight monthly fall, affected by declining U.S. demand for cars and aircraft parts.
Yet imports plunged 14.8 per cent, crashing for the sixth straight month as exports of crude oil, liquefied natural gas and other supplies of fuel also fell in price and size.
A ministry official said the fall in exports and imports was also partially due to heavy rainfall and a strong typhoon striking Japan during the reporting month, crippling supply chains and halting factory operations.
The Oct. 1 rise in consumption tax seems to have contributed to a fall in imports, said analysts in the private sector. Still, it is difficult to assess the effects because natural disasters have played a more prominent role.
“While exports are expected to remain sluggish due to the U.S.-China trade war, imports are also likely to decline as a result of the tax increase due to weak domestic demand,” said Toru Suehiro, Senior Market Economist at Mizuho Securities Co. Suehiro forecasts Japan’s trade balance will move narrowly around the break-even line at the moment.
Exports to China declined by area 10.3 per cent from a year earlier to 1.32 trillion yen, weighed down by falling exports of plastic raw materials and auto parts.
Imports from the largest trading partner in Japan fell 15.4 per cent to 1.59 trillion yen, leaving Japan with a 19th straight month deficit with China at 269.87 billion yen.
While, Japan’s trade surplus toward Asia as a whole, including China, rose by 36.7% to 299.56 billion dollars, driven by improved steel exports to Thailand.
Japan’s trade surplus with the United States, among other allies, shrank from a year ago by 2.7 per cent to 557.54 billion yen in the face of weak auto-exports.
Japan ran a deficit of 46.46 billion dollars with the European Union, due in part to a fall in aircraft engine parts sales to the United Kingdom.
On a customs-cleared basis, the figures were compiled.