| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Balance | ¥345.0B | ¥109.6B to ¥464.1B | ¥366.5B | ¥-379.4B | ¥-377.8B |
| Imports - Y/Y | -7.2% | -7.9% to -0.4% | -4.9% | 0.5% | |
| Exports - Y/Y | 5.8% | 1.8% to 10.3% | 7.3% | 7.8% |
Highlights
Japanese export values rose 7.3 percent on year in March for the fourth straight increase, led by solid global demand for automobiles and Asian purchases of semiconductors while export volumes slipped. The pace of increase was faster than the consensus forecast of a 5.8 percent gain but was slightly slower than the 7.8 percent rise in February.
Import values dipped 4.9 percent (consensus was a 7.2 percent drop) after posting the first year-over-year increase in 11 months with a slight 0.5 percent rise in February and falling 9.8 percent in January. The decrease was led by coal and liquefied natural gas due to their soft prices as well as lower demand for non-ferrous metals whose prices have risen in recent months. There was what appears to be a temporary jump in aircraft purchases in March.
The trade balance recorded a ¥366.5 billion surplus after showing a revised ¥377.8 billion deficit in February. It was the first positive figure since a ¥58.9 billion surplus seen in December and compared with a ¥750.9 billion deficit in March 2023 and a record shortfall of ¥3,506.43 billion (¥3.51 trillion) hit in January 2023.
Shipments to China, one of the key export markets for Japanese goods, posted their fourth straight increase after a year-long decline through November last year amid a gradual recovery in the world's second-largest economy. In its quarterly update to its outlook, the International Monetary Fund left its forecast for China's GDP growth unchanged at 4.6 percent in 2024, slowing from 5.2 percent in 2023.
Japanese exports to the European Union also posted the fourth consecutive gain after showing their first year-over-year drop in 33 months (nearly flat) in November while exports to the U.S. remain robust, up for the 30th straight month, after hitting a record high amount in December 2023.
Econoday's Relative Performance Index stood at plus 29, above zero, which indicates the Japanese economy is performing better than expected. Excluding the impact of inflation, the RPI was at plus 35. The fourth quarter GDP data showed Japan narrowly averted a mild recession in the second half of last year.
Export volumes fell 2.1 percent on year in March for the second straight drop after falling 1.5 percent in February while import volumes slipped 9.4 percent after rising 1.5 percent for the first increase in 16 months the previous month.
In fiscal 2023 that ended last month, exports rose 3.7 percent to a fresh record high of ¥102.9 trillion for the third straight annual increase after rising 15.5 percent to ¥99.22 trillion (the previous record), climbing 23.6 percent in fiscal 2021 and falling 8.4 percent in fiscal 2020. Imports fell 10.3 percent to ¥108.8 trillion after surging 32.5 percent to a record ¥121.28 trillion in fiscal 2022, rising 33.7 percent in fiscal 2021 and falling 11.3 percent in fiscal 2020.
The fiscal 2023 trade balance was a deficit of ¥5.89 trillion after recording a record annual shortfall of ¥22.06 trillion in fiscal 2022, when a spike in energy and commodities markets and the depreciation of the yen pushed up import costs. It followed a deficit of ¥5.67 trillion in fiscal 2021, a ¥998.6 billion surplus in fiscal 2020.
Import values dipped 4.9 percent (consensus was a 7.2 percent drop) after posting the first year-over-year increase in 11 months with a slight 0.5 percent rise in February and falling 9.8 percent in January. The decrease was led by coal and liquefied natural gas due to their soft prices as well as lower demand for non-ferrous metals whose prices have risen in recent months. There was what appears to be a temporary jump in aircraft purchases in March.
The trade balance recorded a ¥366.5 billion surplus after showing a revised ¥377.8 billion deficit in February. It was the first positive figure since a ¥58.9 billion surplus seen in December and compared with a ¥750.9 billion deficit in March 2023 and a record shortfall of ¥3,506.43 billion (¥3.51 trillion) hit in January 2023.
Shipments to China, one of the key export markets for Japanese goods, posted their fourth straight increase after a year-long decline through November last year amid a gradual recovery in the world's second-largest economy. In its quarterly update to its outlook, the International Monetary Fund left its forecast for China's GDP growth unchanged at 4.6 percent in 2024, slowing from 5.2 percent in 2023.
Japanese exports to the European Union also posted the fourth consecutive gain after showing their first year-over-year drop in 33 months (nearly flat) in November while exports to the U.S. remain robust, up for the 30th straight month, after hitting a record high amount in December 2023.
Econoday's Relative Performance Index stood at plus 29, above zero, which indicates the Japanese economy is performing better than expected. Excluding the impact of inflation, the RPI was at plus 35. The fourth quarter GDP data showed Japan narrowly averted a mild recession in the second half of last year.
Export volumes fell 2.1 percent on year in March for the second straight drop after falling 1.5 percent in February while import volumes slipped 9.4 percent after rising 1.5 percent for the first increase in 16 months the previous month.
In fiscal 2023 that ended last month, exports rose 3.7 percent to a fresh record high of ¥102.9 trillion for the third straight annual increase after rising 15.5 percent to ¥99.22 trillion (the previous record), climbing 23.6 percent in fiscal 2021 and falling 8.4 percent in fiscal 2020. Imports fell 10.3 percent to ¥108.8 trillion after surging 32.5 percent to a record ¥121.28 trillion in fiscal 2022, rising 33.7 percent in fiscal 2021 and falling 11.3 percent in fiscal 2020.
The fiscal 2023 trade balance was a deficit of ¥5.89 trillion after recording a record annual shortfall of ¥22.06 trillion in fiscal 2022, when a spike in energy and commodities markets and the depreciation of the yen pushed up import costs. It followed a deficit of ¥5.67 trillion in fiscal 2021, a ¥998.6 billion surplus in fiscal 2020.
Market Consensus Before Announcement
Japanese export values are forecast to rise 5.8 percent for a fourth straight year-over-year increase in March after rising 7.8 percent in February, backed by recovering global demand for semiconductors and plastics. Demand for automobiles from the US and Europe is also seen intact. Import values are expected to fall 7.2 percent, due mainly to lower energy prices, after rising 0.5 percent in February for the first rise in 11 months and slumping 9.8 percent in January.
The trade balance is forecast to show a 345.0 billion surplus after recording a revised ¥377.8 billion deficit in February. It would be the first positive figure since a ¥68.89 billion surplus seen in December 2023 and compare with a ¥750.9 billion deficit in March 2023 and a record shortfall of ¥3,506.43 billion (¥3.51 trillion) hit in January 2023.
The trade balance is forecast to show a 345.0 billion surplus after recording a revised ¥377.8 billion deficit in February. It would be the first positive figure since a ¥68.89 billion surplus seen in December 2023 and compare with a ¥750.9 billion deficit in March 2023 and a record shortfall of ¥3,506.43 billion (¥3.51 trillion) hit in January 2023.
Definition
Merchandise Trade balance measures the difference between imports and exports of both tangible goods and services. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade.
Description
Japan's merchandise trade balance measures visible trade and excludes services. Specifically it is the difference between imports of goods and exports of goods. A positive value indicates a trade surplus (exports exceed imports) while a negative value indicates a trade deficit (imports exceed exports). Movements in the trade balance reflect altered demand for Japanese exports which subsequently impact the yen's value and directly affect GDP growth because of the economy's dependence on trade.
The report gives insight into changing trends regarding Japanese trade. Such developments are especially important for Japan, which is an export-oriented economy that has historically experienced large trade surpluses and any change can have a dramatic effect on the domestic economy. Typically the headline number is the change from the previous year in yen along with the percentage change in exports and in imports from the previous year.
The report gives insight into changing trends regarding Japanese trade. Such developments are especially important for Japan, which is an export-oriented economy that has historically experienced large trade surpluses and any change can have a dramatic effect on the domestic economy. Typically the headline number is the change from the previous year in yen along with the percentage change in exports and in imports from the previous year.
