Containers and gantry cranes stand at a shipping terminal at dusk in Yokohama, Japan. (Photographer: Akio Kon/Bloomberg)

Japan Exports Surprisingly Weak on Stronger Yen, Trade War Fears

(Bloomberg) -- Japan’s trade balance remained in surplus in March, but the increase in exports was less than expected, with sales to the U.S. and EU nearly flat.


  • The value of exports increased 2.1 percent in March from a year earlier (forecast +5.2%).
  • Imports fell 0.6 percent (forecast +6.3%), led by an almost 17 percent slump in shipments from China.
  • The trade balance was a surplus of 797.3 billion yen ($7.4 billion) versus the forecast +499.2 billion yen.

Key Takeaways

The unexpectedly weak growth in exports suggests that while the global economy is growing, concerns about a brewing trade war may be hurting sentiment. Exports to China recovered after a decline in February but imports fell due to the lingering effects of factory shutdowns over the lunar new year.

Japan Exports Surprisingly Weak on Stronger Yen, Trade War Fears

Economist Takeaways

  • Exports are weak, and the big factor is the weakening momentum in global manufacturing, said Hiroaki Muto, chief economist at Tokai Tokyo Research Center. "I now see a possibility it could be worse than a soft patch," with today’s data indicating exports may be weakening as a trend.
  • The trade balance is likely to shrink in coming months as the stronger yen continues to weigh on exports while rising oil prices push up imports, Muto said.
  • "I think this confirms that the economy slowed at the start of the year," according to Masaki Kuwahara, senior economist at Nomura Securities. "Considering trends in global demand, I don’t think exports are going to slow down further from here."
  • "There’s obviously lots of volatility related to the Chinese New Year, so it’s a bit difficult to read too much into the latest numbers," said Marcel Thieliant, senior Japan economist at Capital Economics Asia. The slower growth is "basically due to the stronger yen, which is reducing the yen value of exports and imports invoiced in foreign currency," he said.

Other Details

  • Japan’s adjusted trade balance showed a surplus of 119.2 billion yen (forecast +104 billion yen).
  • Exports to China, Japan’s largest trading partner, rose 10.8 percent in March from a year earlier.
  • Shipments to the U.S. expanded 0.2 percent. There was a 14 percent decline in the value of steel shipments to the U.S., and a 40 percent fall in volume, although a finance ministry official said they weren’t sure if that was due to the U.S. imposition of metal tariffs.
  • Exports to Europe increased 0.3 percent.

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