Bangkok Post

Japan’s ’17 trade surplus tumbles

- KYODO

TOKYO: Japan posted a trade surplus of 2.99 trillion yen ($27 billion) in 2017, the second straight year of black ink, as robust exports exceeded imports that surged amid higher energy prices, government data showed yesterday.

Exports jumped 11.8% to 78.29 trillion yen, reflecting an increase in Asiabound shipments to a record-high value, while imports surged 14.0% to 75.30 trillion yen, according to preliminar­y data from the Finance Ministry.

The trade surplus, however, shrank 25.1% from 2016.

For the past year, Japan has seen rising exports on the back of stronger overseas demand for products such as semiconduc­tor manufactur­ing equipment and cars. This has helped the trade-reliant economy stay in what is widely seen as its second-longest postwar expansion cycle.

But an uptrend in crude oil and other energy prices and the yen’s depreciati­on have boosted the value of imports, weighing on the trade surplus.

The value of crude oil imports to resource-scarce Japan totalled 7.15 trillion yen, up 29.3% from a year before to mark the first gain in four years.

Japan ran a trade surplus of 7.04 trillion yen with the United States, logging the first year-on-year increase in two years. Exports rose 6.8% to 15.11 trillion yen and imports gained 10.3% to 8.08 trillion yen.

Bilateral trade has become a sensitive issue since US President Donald Trump took office a year ago, pushing an “America First” policy agenda and taking issue with his country’s massive trade deficits with major exporters such as Japan and China.

Japan had a 5.93 trillion yen trade surplus with the rest of Asia including China, the world’s second-largest economy which grew 6.9% in 2017. The surplus with the region expanded 51.8% for the third straight year of increase.

Exports to the region gained 15.7% to a record 42.93 trillion yen while imports rose 11.4% to 36.99 trillion yen.

With China alone, Japan reported a trade deficit of 3.55 trillion yen, down 23.7%, following a 20.5% surge in exports to a record 14.89 trillion yen and an 8.4% gain in imports to 18.44 trillion yen.

Japan’s trade deficit with the European Union came to 96.8 billion yen, down 43.0%, the ministry data showed.

With the Internatio­nal Monetary Fund projecting 3.9% global growth in 2018, the world economy is expected to stay in good shape, supporting Japan’s exports.

But economists say movements in crude oil prices and the ability of the Chinese economy to maintain its growth momentum need to be watched closely.

“After strong growth in exports throughout 2017, they will likely remain solid but the pace of growth could slow this year,” said Toru Suehiro, senior market economist at Mizuho Securities Co Ltd.

“That said, the recent surge in crude oil prices should also take a respite so the trade balance as a whole is expected to remain in the black,” he added.

In December, Japan reported a trade surplus for a seventh straight month at 359.0 billion yen, though it shrank 43.5% from a year before as imports gained by a bigger margin than exports in value terms.

Exports saw a 9.3% year-on-year rise to 7.30 trillion yen and imports climbed 14.9% to 6.94 trillion yen, the ministry said.

The figures were measured on a customs-cleared basis.

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