TOKYO (REUTERS) – Japan’s exports rose for the first time in two years in December on the back of shipments to China, government data showed, offering a glimmer of hope for policymakers counting on an export-led recovery amid a resurgence of the coronavirus.
A recovery in exports may ease the risk of a double-dip recession, while the Bank of Japan is seen upgrading its growth forecast for next fiscal year at its rate review ending Thursday. The central bank is expected to stand pat on policy.
Still, the pace of recovery in Japan’s shipments paled in comparison with neighbouring export hubs such as China, Taiwan and South Korea, all of which saw a double-digit growth led by global demand for chip and tech products. Analysts also expect the recovery in Japanese shipments to slow down in the coming months as they approach pre-pandemic levels and with virus infections still surging in Europe and elsewhere.
The Ministry of Finance data out on Thursday (Jan 21) showed Japan’s exports rose 2.0 per cent in December from a year earlier, slightly below a 2.4 per cent increase expected by economists in a Reuters poll but up from a 4.2 per cent decline in the previous month. It marked the first annual increase since November 2018.
By region, exports to China – Japan’s largest trading partner – grew 10.2 per cent in the year to December, led by shipments of plastic, nonferrous metals and other raw materials. Shipments to the United States – a key market for Japanese goods such as cars and electronics – dropped 0.7 per cent year-on-year in December, dragged down by airplanes and chip-making equipment. Exports to Asia, which accounts for more than half of Japanese shipments, advanced 6.1 per cent, while shipments to the European Union decline 1.6 per cent.
Imports fell 11.6 per cent in the year to December, roughly in line with the median estimate, bringing a trade surplus of 751 billion yen (S$9.6 billion).