TOKYO: Japan on Wednesday posted its first trade surplus in almost three years as exports to North America soared and energy bills fell, giving an important psychological boost to Tokyo’s bid to revive the flagging economy.
Finance ministry data showed exports rose 8.5 percent while imports fell 14.5 percent, leaving a surplus of 229.3 billion yen ($1.9 billion), the first time Japan’s trade balance has been in the black since June 2012.
The stronger-than-expected figures come after a string of weak data raised doubts about the health of the world’s number-three economy, and as Tokyo and Washington emerged on Tuesday from marathon talks on a Pacific-wide free trade area saying they were close to a deal.
Japanese Prime Minister Shinzo Abe is hoping that the Trans-Pacific Partnership (TPP)—which includes a dozen nations accounting for about 40 percent of the global economy—will help him push through reforms to the protected agricultural sector, a key element in his wider bid to stimulate growth.
Wednesday’s trade data underscored how Japan has seen its whopping energy import bills decline in line with a dramatic slump in world oil prices.
But liquefied natural gas (LNG) imports remained high, with utilities forced into thermal power generation due to the country’s entire fleet of nuclear reactors still being offline, more than four years after the disaster at Fukushima, the worst atomic accident since Chernobyl in 1986.
A weak yen has supported exports, with the value of shipments to North America jumping 22.1 percent last month, while goods bound for the European Union climbed 9.1 percent.
Exports to key trade partner China rose 3.9 percent — reversing a drop a month earlier.
“External demand will be a bright spot for Japan’s economy this year as domestic consumption and capital investment are expected to remain weak,” Toru Suehiro, an economist at Mizuho Securities in Tokyo, told Bloomberg News.
“Exports are on a rising trend.”
But some economists warned that Japan’s trade balance may not remain in the black.
“We expect the yen to weaken further in coming months, which should lift the cost of imports by more than the yen-value of exports,” Marcel Thieliant at Capital Economics wrote in a commentary.
“The trade balance is unlikely to remain in surplus for long.”
Japan’s premier launched a high-profile policy blitz in early 2013, dubbed Abenomics, in a bid to end years of deflation and tepid growth.
The plan initially showed signs of working, with a falling yen sparking a stock market rally while growth in the wider economy picked up.
But the campaign faltered after the government raised Japan’s sales tax last year to help pay down an enormous national debt.
That hammered consumer spending and led to a brief recession, while falling oil prices hurt the Bank of Japan’s goal of reaching a 2.0 percent inflation rate, a cornerstone of Abe’s plan.
Japan limped out of recession in the last quarter of 2014 with an unimpressive 0.4-percent growth rate.
Business confidence has faltered as output at Japanese factories shrank in February, while inflation stalled as a key measure of prices was flat for the first time in nearly two years.