Ja­pan ex­ports to China rise in Fe­bru­ary

The Pak Banker - - MARKETS/SPORTS -

Ja­panese ex­ports to China rose for the first time in seven months in Fe­bru­ary, the govern­ment an­nounced Thurs­day, though an­a­lysts said the gain was dis­torted by the tim­ing of the Lu­nar New Year hol­i­day.

China is Ja­pan's top trad­ing part­ner, but the Asian gi­ant's eco­nomic growth has been slow­ing as Bei­jing tries to pull off a del­i­cate re­bal­anc­ing to­wards con­sumer spend­ing from ex­ports and govern­ment spend­ing, even as fears of a "hard land­ing" are ris­ing. Ja­pan's ship­ments to China rose 5.1 per­cent in Fe­bru­ary from the same pe­riod last year, the first gain since July, the fi­nance min­istry said.

The in­crease was led by au­to­mo­biles, while metal pro­cess­ing ma­chin­ery and en­gines were also strong, the min­istry said. The re­sult also con­trib­uted to Ja­pan record­ing an over­all trade sur­plus of 242.8 bil­lion yen ($2.15 bil­lion) -- the first in two months -- though fall­ing oil prices were seen as the key con­trib­u­tor.

Mar­cel Thieliant, an econ­o­mist at cap­i­tal Eco­nom­ics, cau­tioned against read­ing too much into the ex­port fig­ures.

"Around half of Ja­pan's ex­ports end up in coun­tries that cel­e­brate Lu­nar New Year, and shifts in the tim­ing of the fes­tiv­i­ties tend to af­fect trade vol­umes," he wrote in a note. Over­all, Ja­panese ex­ports fell 4.0 per­cent in Fe­bru­ary from the same pe­riod last year, led by steel ex­ports, mark­ing the fifth straight monthly de­cline. Im­ports, mean­while, de­clined 14.2 per­cent, largely due to slid­ing prices of liq­ue­fied nat­u­ral gas and oil into re­source-poor Ja­pan.

"Im­port prices of en­ergy, such as crude oil and LNG, have lifted Ja­pan's trade bal­ance," said Ju­nichi Makino, chief econ­o­mist at SMBC Nikko Se­cu­ri­ties. Ex­ports re­mained "weak", but "down­ward pres­sure" on them was also weak­en­ing, he added, while auto ex­ports re­mained solid.

Thieliant also warned, how­ever, that the trend is to­wards a higher en­ergy bill for Ja­pan in com­ing months. "The big­ger pic­ture is that crude oil prices are re­bound­ing while the yen should weaken, so the en­ergy im­port bill should rise again soon," he wrote in a note. The trade data are the lat­est snap­shot for the world's third-largest econ­omy, which shrank 0.3 per­cent in the Oc­to­ber-De­cem­ber quar­ter in an­other blow to Prime Min­is­ter Shinzo Abe's bid to slay nag­ging de­fla­tion and kick-start the econ­omy.

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