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Economy

Japan exports jump most in decade as trade-led recovery perks up

Shipments to China and US lead April surge and boost producer confidence

A container ship at a Tokyo port. A big surge in exports is one of the encouraging signs of a trade-led recovery. (Photo by Kosaku Mimura)

TOKYO (Reuters) -- Japan's exports for April grew the most since 2010, supported by a favorable comparison with the sharp plunge seen during the coronavirus pandemic a year earlier, while capital spending also rose in an encouraging sign of a trade-led recovery.

Supporting the outlook, Japanese manufacturers' confidence hit a more than two-year high in May on the back of solid overseas demand, a Reuters survey showed on Thursday.

Improving exports stood in comparison with a year ago when a slump in global trade due to global coronavirus lockdowns dealt a heavy blow to the world's third-largest economy.

Global demand for cars and electronics have picked up since last year, driven by a recovery in the U.S. and Chinese economies -- Japan's key markets -- although global chip shortages put a drag on overseas shipments in recent months.

Data out Thursday showed exports rose 38.0% in April from a year earlier, compared with a 30.9% increase expected by economists and following a 16.1% rise in March, the fastest gain since April 2010.

By destination, exports to China, Japan's largest trading partner, rose 33.9% year-on-year in April, led by shipments of chipmaking equipment, hybrid cars and scrap copper. U.S.-bound exports grew 45.1% in the year to April on the back of demand for automobiles, car parts and ship engines.

Separate data from the Cabinet Office showed Japan's core machinery orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, rose 3.7% in March from the previous month.

The rise in core orders, which exclude those of ships and electric utilities, compared with a 6.4% increase seen in a Reuters poll of economists, the data showed.

The Cabinet Office maintained its assessment on machinery orders, saying that a pickup is stalling.

Japan's economy fell back into decline in the first quarter and economists have sharply revised down estimates for growth this quarter as emergency curbs hobble consumer spending.

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