Japan posts trade surplus of $23 billion in FY 2017

TOKYO: Japan posted a goods trade surplus of 2.46 trillion yen ($23 billion) in fiscal year 2017 as strong overseas demand lifted the country’s exports to the second-highest level on record, the Finance Ministry said yesterday.

The trade surplus, however, shrank 38.2% from a year ago due to a surge in energy imports such as crude oil, liquefied natural gas and coal. Japan stayed in the black for the second straight year.

In a reading that could disappoint US President Donald Trump, Japan’s trade surplus with the world’s largest economy expanded for the first time in two years.

Trump has been seeking to reduce massive US trade deficits.

The ministry data showed overall exports gained 10.8% to 79.22 trillion yen, up for the first time in three years, as shipments of cars and semiconductor-related equipment surged. Imports rose 13.6% to 76.77 trillion yen, the first gain in four years.

Japan’s surplus with the United States expanded 5.7% to 7 trillion yen in fiscal 2017 through March, as US-bound exports gained 7.5% to 15.18 trillion yen and imports rose 9.1% to 8.18 trillion yen, the preliminary data showed.

Prime Minister Shinzo Abe is in Florida for talks with Trump where trade and security issues are high on the agenda.

The International Monetary Fund has warned of downside risks to the global economy arising from Washington’s move to impose higher tariffs and Beijing’s threat to take retaliatory measures.

Economists at the Daiwa Institute of Research said attention should be given to the possibility that Japan will be targeted under US protectionist trade policy.

For fiscal 2017, the depreciation of the yen apparently helped boost the value of imports. But economists are keeping close tabs on the currency’s recent strengthening against the dollar amid fears of trade frictions.

The dollar averaged 111.07 yen, higher than 108.41 yen in fiscal 2016.

“The economy is expected to grow moderately but its growth momentum may weaken from a cyclical standpoint,” said Toru Suehiro, senior market economist at Mizuho Securities Co Ltd.

“Exports were robust last year but the pace has been slowing since the beginning of this year,” he added.

Japan had a trade deficit of 3.36 trillion yen with China, down 20.3% after imports were up 8.8% to 18.55 trillion yen while exports jumped 18.3% to a record-high 15.19 trillion yen.

Japan’s trade surplus with the rest of Asia, which includes China, expanded 19.5% to 5.86 trillion yen.

The fourth straight year of surplus was reflected in a 13.1% increase in exports to 43.45 trillion yen, the largest on record, and a 12.2% rise in imports to 37.59 trillion yen.

A trade deficit of 182.72 billion yen was registered with the European Union, as imports from the economic bloc hit 9.04 trillion yen, the ministry data showed.

For March alone, Japan had a goods trade surplus of 797.3 billion yen.

Exports were up 2.1% to 7.38 trillion yen while imports fell 0.6% to 6.58 trillion yen, marking the first drop in 15 months.

The figures were measured on a customs-cleared basis.