Japan stays in trade deficit in March; February chemical exports fall 2.1%

SINGAPORE (ICIS)–Japan looks set for another month of trade deficit, with March export growth slowing against a double-digit increase in imports amid a slowing global economy and expensive fuel imports.

The world’s third-biggest economy has been running on trade deficit for nearly two years.

In the first 20 days of March, total exports inched up by 1.1% year on year to Japanese yen (Y) 5.57tr ($42bn), while imports grew by 13% to Y6.32tr, preliminary data from the Ministry of Finance (MOF) showed on 7 April.

In February, Japan posted its 20th consecutive month of trade deficit at Y900bn, with total exports up 6.5% year on year at Y7.65tr and imports growing at a faster rate of 8.3% to Y8.55tr.

Exports to China for the month fell by 10.9% to Y1.32tr, while shipments to the US increased by 14.9% at Y1.46tr.

Chemical exports in February fell by 2.1% year on year to Y893.7bn.

Exports of organic chemicals for the month fell by 5.3% to Y170.1bn, while shipments of plastic materials declined by 12.1% at Y223.8bn, updated preliminary data from the Ministry of Finance (MOF) showed on 30 March.

By volume, February exports of plastic materials fell by 11.4% to 424,525 tonnes in February.

Meanwhile, Japan swung to a current account surplus of Y2.2tr in February from a deficit of Y1.99tr amid improved income gains from overseas investments which helped outweigh its goods trade deficit, official data showed on Monday.

Current account measures an economy’s transactions involving foreign exchange with the rest of the world.

Japan’s goods trade deficit in February narrowed to Y604.1bn from Y3.18tr in the previous month.

Primary income, which reflects returns on overseas investments, posted a surplus of Y3.44tr in February, up from Y2.28tr in January this year.

Meanwhile, Japan has appointed academic Kazuo Ueda as the successor to Haruhiko Kuroda as central bank governor for the next five years.

Kuroda’s decade-long term at the helm of Bank of Japan (BoJ) ended on 8 April.

Under his term, Japan has maintained ultra-low interest rates to support economic growth, bucking the global trend of aggressive monetary tightening amid surging inflation in 2022.

Focus article by Nurluqman Suratman

($1 = Y132.71)

Thumbnail image: A container ship berthed at a port in Tokyo, Japan on 14 February 2023. (Source: FRANCK ROBICHON/EPA-EFE/Shutterstock)

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