Japanese Exports Stronger To Asia And USA

By: Mike Campbell

Year-on-year statistics show that Japan’s exports have risen by a staggering 45% for the month of February. Whilst, clearly, this is good news for Japan and indicates growing international demand for Japanese products, one must remember that the trading base in February 2009 was very low, so the growth is not quite as impressive as it may seem at first. Japan first managed an increase in its exports only in December 2009, following on from 15 straight months of decline. When the data for last month is seasonally adjusted, it reveals that exports fell by 1.7% against the figures for January 2010. This decline has led some to conclude that the Japanese recovery is running out of steam, but such an analysis may well be premature.

The bulk of the increased trade was with Asia, accounting for 55% of the rise. The volume of car exports to the USA doubled compared to last year; this despite the much publicised and embarrassing recall of many Japanese cars to fix technical faults recently.

The data also reveals that Japan is importing more goods, indicating improved domestic demand. However, the exports outstripped imports by a healthy $7bn, a figure which exceeds the estimates. The improved economic performance comes against a backdrop of a high Yen which makes Japanese exports more costly and therefore less appealing. The figures perhaps say more about demand within Japan’s trading partners than they do about the fundamentals in Japan. Japan still has grave concerns about weak domestic demand due to deflation and concerns about the record unemployment level. If the demand for Japanese goods remains strong, it should create new job opportunities within the exporting sector. Employment trends will be a more accurate tool to assess whether or not the Japanese recovery is petering out.