ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Economy

Japan exports post largest monthly gain since late 2017

China-bound shipments lead surge but worries remain amid COVID pandemic

Japan's exports to the United States rise 4.9% on strong demand for cars and construction machinery.   © Reuters

TOKYO (Reuters) -- Japan's exports posted their strongest growth in more than three years in March, led by a surge in China-bound shipments, in a sign the economic recovery from last year's deep coronavirus slump remains intact.

However, the trade data is unlikely to completely ease worries about the fragile recovery of the world's third-largest economy, which took an enormous hit from a collapse in global trade due to the pandemic in the first quarter of 2020.

Ministry of Finance data showed on Monday exports surged 16.1% in March from a year earlier, marking the steepest rise since November 2017. That was better than an 11.6% jump expected by economists in a Reuters poll, and followed a 4.5% contraction in February.

"The rebound in exports slowed significantly across Q1 and external demand is unlikely to provide much of a tailwind to growth this year," said Tom Learmouth, Japan economist at Capital Economics.

"The impressive annual figure was down to base effects from the weakness in exports in March 2020."

The exports surge was also marked by especially strong shipments to Japan's largest trading partner China, while the pace of recovery in firms' exports to the United States remained relatively slow, said analysts.

"Most exports to China aren't very high-tech, and there's the possibility there will be restrictions amid rising U.S.-China tensions," said Takeshi Minami, chief economist at Norinchukin Research Institute.

Shipments to China, Japan's largest trading partner, soared 37.2% in the year to March, led by nonferrous metals and plastic materials, and also boosted by stronger exports of semiconductor machinery.

However, Japan's economy was likely to face headwinds from a slower recovery in U.S.-bound shipments, which tend to add more value than those exported to China and elsewhere in Asia, for at least another couple of months, he added.

Exports to the United States, the world's top economy, rose 4.9% to post their first year-on-year gain in five months, as strong demand for cars and construction machinery such as bulldozers offset lower shipments of aircrafts.

Shipments to Asia as a whole gained 22.4%, while those to the European Union advanced 12.8% in March.

Imports rose 5.7% in March compared with the same month a year earlier, versus the median estimate for a 4.7% increase, bringing a trade surplus of 663.7 billion yen ($6.11 billion) versus the median estimate for a 490.0 billion yen surplus.

The trade data follows the Reuters Tankan poll on Friday that found confidence among Japanese manufacturers rose to a more than two-year high in April as strong demand in the electronics market boosted prospects for exporters.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more