Hisane Masaki, Special Correspondent | Mar 22, 2012 8:16AM EDT
Japan posted a surplus of $396.39 million in its trade with the rest of the world in February after incurring a record monthly deficit of $17.80 billion in January, according to preliminary figures released by the Finance Ministry on Thursday.
It was the first trade surplus in five months. Many analysts had expected another trade deficit in February.
Exports continued to fall due to the strong yen and a slowdown in the global economy caused primarily by the European debt crisis, while imports continued to surge, led by alternative fuels to atomic power generation in the wake of the nuclear crisis.
The strong yen makes Japanese products more expensive abroad. Japan is now the world’s third-largest economy after the United States and China and is heavily dependent on exports for growth.
The surprise trade surplus in February came as the pace of decline in overall exports slowed significantly due largely to brisk shipments to the U.S.
Japan’s overall exports fell for the fifth straight month in February on a year-on-year basis, declining 2.7 percent to $65.55 billion. But the pace of decline was much slower than the 9.2 percent drop seen in January.
The export decline was led by steel, mineral fuels and plastics, which tumbled 12.6 percent, 37.9 percent and 17.2 percent, respectively, in terms of value. Auto exports rose 7.4 percent in terms of value.
Japan’s overall imports rose for 26 months in a row in February on a year-on-year basis, increasing 9.2 percent to $65.16 billion. The import growth was fueled by liquefied natural gas (LNG), crude oil and telecommunications equipment, which soared 53.8 percent, 15.5 percent and 59.8 percent, respectively, in terms of value.
Resource-poor Japan imports almost all of its oil and natural gas. The country imports natural gas in the form of LNG and is by far the world’s largest importer of the cleaner-burning fuel.
Meanwhile, Japan’s exports to the U.S. rose for the fourth consecutive month in February on a year-on-year basis, jumping 11.9 percent to $11.49 billion, while its imports from the U.S. grew for the second successive month, increasing 4.3 percent to $5.74 billion.
As a result, Japan’s trade surplus with the U.S. expanded for the first time in two months in February on a year-on-year basis, widening 20.7 percent to $5.75 billion. The U.S. is now Japan’s second-largest trading partner after China.
The growth in exports to the U.S. was driven by automobiles, which surged 26.9 percent in terms of value.
The year-on-year pace of growth in the U.S-bound shipments significantly quickened from just 0.7 percent in January. This sharply contrasts with slumping shipments to the 27-nation European Union (EU) and to the rest of Asia, which fell 10.7 percent and 6.6 percent, respectively, in February from a year earlier.
Contact Hisane Masaki at yiu45535@nifty.com.