Japanese exports fell in February for the first time in three months as U.S. and China-bound shipments weakened, a source of concern for the world’s third-largest economy as it tries to prop up growth.
The trade data comes on the eve of the Bank of Japan’s two-day policy review at which it may phase out a numerical target for its risky asset buying, underscoring the rising cost of prolonged easing under Governor Haruhiko Kuroda’s stimulus.
The prospects for a U.S. recovery may ease concerns about the outlook for Japan’s economy, however, which is seen contracting in the current quarter due to new COVID curbs that have hit service-sector activity.
Ministry of Finance data out on Wednesday showed Japanese exports fell 4.5% year-on-year in February, hurt by decline in U.S.-bound shipments of automobiles.
It was the first decline in three months, following a 6.4% gain in January. It was much bigger than a 0.8% drop expected by economists in a Reuters poll.
By region, exports to China rose 3.4% in the year to February, led by chip-making equipment, nonferrous metals and plastic, slowing sharply from a 37.5% gain in the prior month.
U.S.-bound shipments, another key export market for Japanese goods, declined 14.0% year-on-year in February, dragged down by automobiles, airplane parts and motors, after a 4.8% drop in the prior month and posting a fourth straight month of declines.
Exports to Asia, which accounts for more than half Japan’s overall shipments, fell 0.8% in the year to February, while those to European Union declined 3.3%, the data showed.
Wednesday’s trade data follows the Reuters Tankan poll that found Japanese manufacturers grew more upbeat about a gradual recovery though worries about COVID impact lingered.
Imports rose 11.8% in the year to February, roughly matching the median estimate, following a 9.5% drop in the prior month.
Imports marked the first annual gain in 22 months due to a pick-up in domestic demand, restocking of inventory and rises in crude oil and resources prices.
The trade balance came to a surplus of 217.4 billion yen ($2 billion), versus the median estimate for a 420.0 billion yen surplus.
($1 = 109.0300 yen)
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