Japan: Exports Surge, Trade Deficit Shrinks

Econintersect:  Japan’s exports continued the up trend in January 2015 that started a year ago. The value of exports grew 17% over the level in January 3014. Exports fell  by 11% from December to January, which is a typical seasonal change, although less than the average over the past decade (nearly 16% drop).   Imports also improved, dropping 9.0% from the same month a year ago, driven primarily by lower oil costs. Both exports and imports were much better than had been forecast.  As a result there was a big improvement in the balance of trade with the trade deficit shrinking by 58% from January 2014.

The following graphs from Trading Economics show the most recent decade of trade data for Japan.

The balance of trade increased in deficit from December to January but by the smallest amount in the last decade, except for January 2010 which was similar.

Comments from Others

 

Misuru Obe, MarketWatch:

export growth has been largely fueled by growth in external demand, rather than by any changes caused by Abenomics. The Bank of Japan’s export-price indicator shows most Japanese exporters are still refraining from cutting the prices of their products, opting instead to pocket fatter profits created by the cheaper currency.

Takeshi Minami, chief economist at Norinchukin Research Institute disagreed with Obe’s pricing opinion (Reuters):

The BOJ will wait to see how oil prices may impact people’s deflationary mindset, and brisk trade data will encourage Kuroda to stand pat on policy for the time being.  A jump in export volume suggests that Japanese exporters who have gained hefty profits due to a weak yen are lowering exporting prices to boost shipments.

Misuru Obe, MarketWatch:

With exports rising and imports falling, some economists now expect the trade balance to turn positive as early as this spring. But others caution against premature optimism.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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