Japan’s exports grow at a slower pace in January

TOKYO: Japan’s exports rose in January at a slower pace than the previous month due to a decline in shipments to the United States and the Lunar New Year holidays and as concerns about growing trade protectionism cast doubts over the outlook.

Exports in January rose 1.3% from the same period a year ago, less than the median estimate for a 4.7% annual increase and slower than a 5.4% year-onyear increase in December. It’s the second month in a row exports have grown, following 14 straight months of contraction.

Meanwhile, imports into the world’s third-largest economy posted their first increase since December 2014 as oil prices rose following the Organization of the Petroleum Exporting Countries’ agreement last year to cut production.

Stronger economic growth in the US suggests the decline in Japan’s US-bound exports could be temporary, but US President Donald Trump’s repeated pledges to pull back from free trade have raised concerns that protectionism will spread.

“The trend for exports remains strong, because global demand is gaining strength,” said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities.

“If Japanese carmakers continue to take market share in the US, there will be complaints. This is a risk, because Japan needs exports for growth.”

The increases in headline export and import numbers were driven in part by stronger trade prices, masking a more mixed picture on volumes, which were weaker among some product classes.

Exports rose in January due to higher shipments of fuel, car parts and steel, but a decline in auto exports contributed to the slower pace of growth, data from the Finance Ministry showed yesterday.

Japan’s exports to the US fell 6.6% in January from a year ago, due to fewer shipments of auto and electronic parts.

Japan’s trade surplus with the United States fell an annual 26.6% to 399.3 billion yen ($3.54 billion), following a 5.1% annual decline in the previous month.

If the trade surplus with the United States starts rising again, it could become a flashpoint after Trump singled out Japan, China and Germany for their high exports into the US market.

Exports to China, Japan’s largest trading partner, rose 3.1% year-on-year in January, slower than a 12.4% annual increase in the previous month as factories slowed production before the Lunar New Year holidays.

Imports rose 8.5% in the year to January, faster than the median estimate for a 4.7% annual increase. That marked the first increase in more than two years due to a surge in imports of crude oil from Saudi Arabia and coal from Australia, the data showed.

The trade balance came to a deficit of 1.09 trillion yen, versus the median estimate for a 636.8 billion yen deficit.