Japan posted its first trade surplus in six years in fiscal 2016, standing at ¥4.01 trillion, as the value of imports fell sharply amid persisting low oil prices, government data showed Thursday.
It was the first annual surplus on a fiscal year basis since the March 2011 Fukushima nuclear disaster, which prompted Japan to import more fossil fuels as its nuclear power plants were taken offline amid heightened safety concerns. But lower energy prices have helped take pressure off Japan’s trade balance.
Imports for the year to March 31 tumbled 10.2 percent from a year earlier to ¥67.52 trillion, for the third consecutive year of decline, as crude oil and liquefied natural gas imports continued to slide. Exports dropped 3.5 percent to ¥71.52 trillion, reflecting decreased shipments of cars and steel.
The resource-poor nation relies heavily on energy imports. Reflecting a fall in energy prices, imports of crude oil fell 16.1 percent in the reporting year and those of liquefied natural gas plunged 26.6 percent.
With the yen showing an average 10 percent appreciation against the dollar, Japan also saw the value of its exports drop for the year to March 31, the Finance Ministry said in a preliminary report.
“With exports picking up over the past few months against the backdrop of a recovery of the global economy, the trend (of improvement in Japan’s trade balance) is likely to continue for a while,” said Masaki Kuwahara, senior economist at Nomura Securities Co.
Kuwahara said he would carefully watch the pace of recovery in Japan’s exports to the United States amid expected pickups in U.S. demand on positive economic conditions. But he would also monitor the effects of U.S. President Donald Trump’s trade policy after he raised concerns about U.S. trade deficits with Japan and pulled the country out of the Trans-Pacific Partnership free trade pact.
Japan and the United States agreed Tuesday to discuss a bilateral framework for trade and investment rules as U.S. Vice President Mike Pence visited Tokyo for the first round of an economic dialogue. He said the dialogue could lead to negotiations on a bilateral free trade agreement.
Japan’s trade surplus with the United States, a major destination for Japanese exports, shrank for the first time in five years, reflecting decreased U.S.-bound shipments of cars and steel as well as increased imports of liquefied petroleum gas.
Exports to the United States fell 6.5 percent to ¥14.12 trillion and imports decreased 4.9 percent to ¥7.49 trillion, resulting in a trade surplus of ¥6.63 trillion.
With China, Japan’s trade deficit shrank for the first time in six years. Shipments to the Asian powerhouse fell 1.3 percent to ¥12.83 trillion amid falling demand for mobile phone parts and metal processing machinery. Decreased imports of clothing and personal computers contributed to a 10.6 percent fall in Japan’s overall imports to China to ¥17.05 trillion. That left Japan with a trade deficit of ¥4.22 trillion.
Exports to the European Union dropped 1.5 percent to ¥7.98 trillion, and imports were down 7.1 percent to ¥8.11 trillion on decreased pharmaceutical imports, translating into a ¥135.4 billion trade deficit, marking red ink for the fifth consecutive year.
In March alone, Japan reported a ¥614.7 billion trade surplus, for the second straight month of black ink.
Exports grew 12 percent to ¥7.23 trillion, for the fourth consecutive month of expansion, helped by growth in auto parts shipments. Imports surged 15.8 percent to ¥6.61 trillion on increased oil and coal imports.
The figures were measured on a customs-cleared basis.