Open

Coming up

Don't miss

Replay


LATEST SHOWS

FASHION

Fashion, what's happened in 2014

Read more

FRANCE IN FOCUS

France: 2014 in review

Read more

#THE 51%

South Africa: Taking a stand against child marriage

Read more

DEBATE

The Future of the Book

Read more

DEBATE

The Future of the Book (part 2)

Read more

REPORTERS

France 24’s best documentaries of 2014

Read more

THE INTERVIEW

'We have to build a new Tunisia', says the president of the Tunisian Parliament

Read more

FACE-OFF

France on alert after attacks: a case of collective hysteria?

Read more

THE INTERVIEW

'Beijing needs to revaluate its policy in the Tibetan areas', says FM of the Tibetan government-in-exile

Read more

Business

Trade surplus soars as exports drive recovery

Text by News Wires

Latest update : 2010-05-27

Japan's trade surplus soared in April, data showed Thursday, as exports led by the auto sector continued to drive a tentative recovery in the world's second largest economy.

REUTERS - Japanese exports marked their fifth-largest annual gain on record in April, a sign that brisk demand from fast-growing emerging Asian nations is underpinning the country's fragile economic recovery.

The euro's weakness triggered by the European debt crisis had little effect on shipments to the region, although analysts warn the effect may gradually be felt if the crisis is prolonged.

Exports rose 40.4 percent in April from a year earlier, more than a median market forecast for a 38.9 percent increase and the fifth straight month of gains, trade balance data released by the Ministry of Finance showed on Thursday. Compared with March, exports rose 2.3 percent in April.

"Exports remain very firm even after very strong growth in January-March. The pace of export growth will slow in April-June, but we expect exports to continue to expand," said Azusa Kato, an economist at BNP Paribas in Tokyo.

Exports to Asia, which account for more than half of Japan's total exports, rose 45.3 percent from a year earlier, on strong demand for electronic and auto parts. While the rise was smaller than annual gains exceeding 50 percent marked each month so far this year, it was bigger than any other export destination.

Asian economies, particularly China, have enjoyed robust growth even as developed nations suffer concerns about huge public debt in the aftermath of the global financial crisis.

The OECD forecasts China's economy will grow 11.1 percent this year, far stronger than 3.0 percent predicted for Japan and 3.2 percent in the United States.

U.S.-bound shipments were up 34.5 percent on brisk car demand. Shipments to the European Union increased 19.8 percent from a year earlier, slowing from a 26.7 percent gain in March but marking the fifth straight month of increase.

The slowdown was due almost entirely to the fact that exports to Europe staged a rebound in April last year, making the annual pace of gains appear small for this year's April data, analysts said.

Limited impact from Europe

Transport disruption caused by the volcano in Iceland, which led to flight cancellations and airport closures in Europe, had little impact on Japan's trade with the region, a finance ministry official told a briefing on Thursday.

Economists say the debt crisis in Europe will also have little impact on the Japanese economy as exports to the region account for only about 10 percent of total exports.

But some say further turmoil in financial markets could disrupt the global economic rebound and stifle Japan's export-led recovery.

"The European problems will not directly impact Japanese exports but they may affect the country's exports indirectly from the latter half of this year if Asia takes a hit, as it depends on European-bound shipments to a greater degree," said Junko Nishioka, chief Japan economist at RBS Securities.

The yen's rises against the euro may also hurt exports if they are prolonged and lead to yen gains against the dollar.

The euro hovered near 8-½ year lows versus the yen at around 109.90 yen on Thursday on persistent worries about Europe's debt problems.

That is unwelcome news for many Japanese exporters, who have set their currency assumption rates for euro/yen at 120-125 yen for the year to March. A stronger yen eats into exporters' profits when repatriated.

The finance ministry official said the government is closely watching how Europe's debt problems and the ensuing fall in the euro against the yen will affect exports.

Exports have been recovering faster than many economists forecast in the past few months, prompting economists to revise up their forecasts for Japan's growth.

Strong exports helped the Japanese economy grow 1.2 percent in January-March, outpacing growth in the United States and the euro zone in the same period.

The trade balance came to a surplus of 742.3 billion yen ($8.25 billion), compared with the median estimate for a 709.3 billion yen surplus.

 

Date created : 2010-05-27

  • STOCK MARKET

    Euro hits four-year low as eurozone debt fears persist

    Read more

  • AUTO INDUSTRY

    Toyota roars back into black despite recalls

    Read more

  • AUTO INDUSTRY

    Toyota rides recall storm with March sales surge

    Read more

COMMENT(S)