Japan’s Ministry of Finance released data on Thursday stating that exports had risen by 17 percent in January from the previous year. This boost is attributed to stronger shipments of machinery, vehicles and electronics, aided by the country’s weakened currency.
Imports experienced the largest drop in over five years of nine percent, with a significant decline of almost 25 percent for oil and gas imports contributing to this figure.
Economic growth in the US has also played a significant role in Japan’s recent export success
The marked improvement in both areas has had a considerable impact to the trade deficit, which has fallen to 1.18trn yen; despite over two years of month-on-month shortfalls, this is nearly 60 percent less than the figure recorded in January 2014.
There has been a surge in exports to China, which jumped by 20 percent from the previous year, largely resulting from the rapid demand for electronic parts used by smartphone manufacturers. Elsewhere in Asia, the demand for semiconductor components soared by 27 percent.
Economic growth in the US has also played a significant role in Japan’s recent export success, rising by 16.5 percent last month. Specifically, pick-up trucks have been a key sale to the US market, with an increase of 14 percent.
Despite recent success in the export market, the possibility of continued growth is far from certain. Although low oil prices are having a positive impact on the manufacturing sector, this is being offset by high import prices. In addition, the labour market in Japan has tightened, thereby limiting the potential for increasing production. Recent export growth has been driven by a greater demand from overseas markets and a weak yen, therefore, unless production capabilities are enhanced, it is unlikely that this trend can endure at the current rate.
