Japanese exports recorded their strongest growth in more than three years in March, led by increased shipments to China, a sign that the economic recovery from last year’s deep coronavirus crisis remains intact.
However, trade data is unlikely to completely allay concerns about the fragile recovery of the world’s third-largest economy, which was hit hard by the collapse in global trade due to the pandemic in the first quarter of 2020.
Data from the Ministry of Finance showed on Monday that exports jumped 16.1% in March from a year earlier, marking the largest increase since November 2017. It was better than a jump of 11.6 % expected by economists in a Reuters poll, and followed a 4.5% contraction in February. .
“The rebound in exports slowed considerably in the first quarter and external demand is unlikely to provide much of a positive wind for growth this year,” said Tom Learmouth, Japanese economist at Capital Economics.
“The impressive annual figure is due to the base effects of weak exports in March 2020.
The surge in exports was also marked by particularly strong shipments to China, Japan’s largest trading partner, while the pace of the recovery in business exports to the United States remained relatively slow, analysts said.
“Most of the exports to China are not very high tech and there may be restrictions amid growing tensions between the United States and China,” said Takeshi Minami, chief economist. at the Norinchukin Research Institute.
Shipments to China, Japan’s largest trading partner, climbed 37.2% year-on-year through March, driven by non-ferrous metals and plastics, and also boosted by stronger exports of semiconductor machines.
However, the Japanese economy is expected to face headwinds from a slower recovery in shipments to the United States, which tend to add more value than those exported to China and elsewhere in Asia, for at least another a few months, he added.
Exports to the United States, the world’s largest economy, rose 4.9% for their first year-over-year gain in five months, as strong demand for cars and construction machinery like bulldozers drastically increased. offset the decline in aircraft shipments.
Shipments to Asia as a whole rose 22.4%, while those to the European Union rose 12.8% in March.
Imports rose 5.7% in March from the same month a year earlier, compared to the median estimate of a 4.7% increase, bringing a trade surplus of 663.7 billion yen ( $ 6.11 billion) compared to the median estimate of a surplus of 490.0 billion yen.
The trade data follows Friday’s Reuters Tankan poll which found Japanese manufacturers ‘confidence peaked more than two years in April as strong demand in the electronics market boosted exporters’ prospects.
Source: Reuters (Reporting by Daniel Leussink; Editing by Sam Holmes)