Japanese exports slow on Lunar New Year holidays
March 19 2018 10:33 PM
Employees work at an assembly line of the Toyota Motor’s Prius hybrid car at the Tsutsumi plant in central Japan. The country’s automobile shipments to the US jumped 12.3% in February.


Japan’s exports rose for a 15th straight month in February but slowed sharply from the prior month as shipments stalled because of Lunar New Year holidays – an event analysts dismissed as a one-off blip in the context of solid overseas demand.
“The Lunar New Year distortion caused a severe slowdown in February, but the increasing trend remained intact.
Japan’s exports are maintaining a rising trend reflecting the global economy’s high growth and the outlook is expected to keep rising,” said Yoshimasa Maruyama, chief economist at SMBC Nikko Securities.
Analysts expect solid global demand for semiconductors and electronics will support the expansion in exports, but they also worry that US President Donald Trump’s import tariffs on steel and aluminium could spark a trade war.
“Based on the firm trend in overseas machinery orders and the elevated level of business sentiment globally, we see a solid outlook for exports,” said Yuichiro Nagai, economist at Barclays Securities.
Ministry of Finance (MOF) data out yesterday showed exports grew 1.8%, roughly in line with a 1.9% increase expected by economists in a Reuters poll.
It followed a revised 12.3% rise in January.
In volume terms, Japan’s exports fell 2.1% in February from a year ago, the first drop in 13 months, the data showed.
SMBC Nikko Securities’ Maruyama estimated that real exports grew 3.6% on average in January and February combined, up by 1.3 percentage point from the previous quarter, with exports on track for an eighth consecutive quarter of growth in January-March.
By region, exports to China, Japan’s biggest trading partner, fell 9.7% year-on-year in February, the trade data showed.
Shipments to Asia, which account for more than half of Japan’s exports, declined 3.2% in the year to February.
Shipments to the United States rose 4.3% in the year to February, driven by hybrid cars.
Automobile shipments to the United States jumped 12.3%.
The trade data suggested that net trade may have weighed on gross domestic product (GDP) growth in the current quarter, but some economists expected a rebound in export volumes in March.
“Today’s trade figures will not deter those in the US government who want to erect additional barriers to trade,” said Marcel Thieliant, senior Japan economist at Capital Economics.
Japan’s trade surplus with the United States rose an annual 3.4% in February to 631bn yen ($5.94bn) – the first gain in three months – at a time when Trump seeks bilateral deals to fix trade imbalances under his “America First” policy.
Trump pressed ahead earlier this month with import tariffs of 25% on steel and 10% on aluminium, describing the dumping of these products in the US market as “an assault on our country”. Japan’s overall imports rose 16.5% in the year to February, broadly matching the median estimate of a 17.1% increase, led by imports of clothing from China and rising costs of crude oil and liquefied natural gas.
The overall trade balance came to a surplus of 3.4bn yen, versus the median estimate of a 99.6bn yen deficit.

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