Japan’s Merchandise Trade Surplus Narrows in March; Exports Surge 12%

Japan’s trade surplus narrowed in March, as import growth outpaced exports.

The Ministry of Finance reported a merchandise trade surplus for March of ¥614.7 billion, down from a surplus of ¥813.4 trillion in February. Analysts in a median estimate forecast a surplus of ¥575.8 billion.

Exports rose at an annualized 12% in March, following a gain of 11.3% the month before. Exports have now risen for four consecutive months, partially offsetting a 15-month decline.

Japanese imports rose 15.8% in the 12 months through March, following a gain of 1.2% in February.

In seasonally adjusted terms, Tokyo posted a trade surplus of ¥172.2 billion last month, official data showed.

Rising exports are one of the strongest signs the Japanese economy is heading in the right direction. The International Monetary Fund (IMF) cited robust export growth as one of the main reasons for its more favorable view of the world’s third largest economy. The Washington-based lending institution expects Japan to grow 1.2% in 2017, up from a January prediction of 0.8%.

Gross domestic product (GDP) expanded 1% in 2016.

Inflation also appears to have bottomed out, with core prices rising for two consecutive months. Core inflation rose at a year-over-year pace of 0.2% in February, Japan’s statistics bureau reported last month.

The Bank of Japan (BOJ) made no changes to monetary policy last month. The central bank’s next policy meeting is scheduled for next week.

Sam Bourgi is a financial market analyst for economiccalendar.com. He has more than six years of progressive experience in economic and financial analysis, research consulting and sectoral analysis. As a published author in government, peer-reviewed, online and industry sources, he has developed a fundamental approach to the financial markets with a broad focus on stock indices, commodities and the technology sector. He earned his Bachelor’s Degree from the University of Windsor and Master’s degree from McMaster University.