Japan April Exports Accelerate

Japan’s exports accelerated in April on increased shipments of cars and machines used to make semiconductors, with rising volumes suggesting healthy overseas demand could help the economy recover quickly from a dip in the first quarter.

Exports grew 7.8% in April from the same period a year ago, below the median estimate for an 8.1% annual increase expected by economists in a Reuters poll. In March, exports grew an annual 2.1%.

In terms of volume, which strips away the impact of exchange rates, Japan’s exports rose an annual 4.6% in April, faster than the 1.8% annual increase seen in March.

Exports are likely to continue to grow thanks to increased demand for manufacturing equipment, cars and car parts, but Japan’s trade surplus with the United States makes it a potential target for US President Donald Trump’s protectionist policies.

“Overseas economies are in a growth phase, so Japan’s exports will continue to do well,” said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities.

“The US government may turn its attention to Japan’s trade surplus, but there are steps Japan can take, especially given the close defense relationship between the two countries.” The rise in the volume of exports was another reason to be optimistic, Miyazaki noted.

Exports of cars rose 15.3% in April from the same period a year ago, while exports of semiconductor manufacturing equipment rose 18.2% year-on-year, finance ministry data showed on Monday.

Exports to China, Japan’s largest trading partner, rose an annual 10.9% in April, versus a 10.8% increase in the previous month, due to an increase of shipments of machines used to process metals and to make electronic components.

Japan’s exports to the United States rose 4.3% year-on-year in April, faster than a 0.2% annual increase in March.

Japan’s trade surplus with the United States was 615.7 billion yen ($5.55 billion) in April, up 4.7% from the same period a year ago. In March the trade surplus with the United States fell an annual 0.3%.

Meanwhile, Japan’s monthly trade balance was a surplus of ¥626 billion ($5.63 billion), missing a ¥797 billion estimate in a Nikkei survey, in part due to a surge in crude oil imports from Saudi Arabia and aircraft engine imports from the US.

The result outpaced the median forecast of a surplus of ¥411.1 billion in a Jiji Press poll of 19 research institutes.