Japan reported an unexpected trade surplus for February and higher-than-forecast exports, adding to evidence of a rebound in the world’s third-biggest economy.
Overseas shipments dropped 2.7 per cent from a year earlier, the finance ministry said on Thursday in Tokyo. The median forecast of 28 economists surveyed by Bloomberg News was for a 6.5 per cent decrease. Imports rose a more-than-estimated 9.2 per cent, leaving a surplus of 32.9 billion yen ($395 million).
The yen’s decline of about seven per cent against the dollar since the Bank of Japan expanded monetary stimulus on February 14 is making exports more competitive for companies such as Sony Corp. The Cabinet Office said yesterday that the economy is picking up “slowly” after the earthquake and tsunami that devastated northeastern regions in March last year.
On Thursday’s figures indicate that “a recovery in exports will likely be sustainable,” said Kohei Okazaki, an economist at Nomura Securities Co in Tokyo. “Japan’s economy will likely return to growth this quarter and maintain a good pace of growth in the following quarters.”
Retail sales in the US rose the most in five months in February, adding to signs of improvements in global demand.
Japan’s import bill is being swelled by energy costs because of rising oil prices, a weaker yen and nuclear plant shutdowns that followed last year’s Fukushima reactor meltdowns.
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Imports of liquefied natural gas surged 53.8 per cent from a year earlier, on Thursday’s report showed.
“We shouldn’t think that Japan’s trade balance has turned a corner,” said Junko Nishioka, an economist at RBS Securities Japan Ltd. “There’s a possibility that Japan will go back to trade deficits.”
Power shortages have been a particular challenge for the western region of Kansai, which accounts for a fifth of Japan’s economy, where all nuclear plants have been shut down. Power supply may be up to 25 per cent less than peak summer demand if plants are not restarted, according to Kansai Electric Power Co.
Nuclear-free Kansai
Osaka Mayor Toru Hashimoto is considering a proposal to use his city’s status as the largest shareholder in Kansai Electric to call on the utility to abandon its use of nuclear power at a shareholders’ meeting in June, the Wall Street Journal reported this week.
Having all nuclear reactors offline this summer could put a strain on the economy, BOJ board member Yoshihisa Morimoto said in a speech in Kobe, western Japan, on Thursday.
Japan’s gross domestic product contracted at an annual 0.7 per cent rate in the fourth quarter and economists surveyed by Bloomberg News forecast it will expand 1.7 per cent this quarter.
Elsewhere in the region, New Zealand’s economic growth slowed to half the pace economists predicted in the fourth quarter as manufacturing fell. Gross domestic product rose 0.3 per cent in the three months ended December 31 from the previous quarter, Statistics New Zealand said in a report released on Thursday in Wellington.
China manufacturing
In China, manufacturing may contract for a fifth month in March, according to a preliminary reading of an index from HSBC Holdings Plc and Markit Economics. The 48.1 reading, a four- month low, compares with a final 49.6 in February. A result below 50 indicates contraction.
Taiwan is expected to hold its interest rate for a third straight meeting, according to 11 of 12 economists in a Bloomberg News survey. In the US, claims for jobless benefits are expected to match a four-year low of 350,000 for the week ended March 17, the labor department is likely to say.
US house prices in January rose 0.3 per cent from the previous month, a survey showed, while the index of US leading indicators rose 0.6 per cent in February, according to a separate Bloomberg News survey.
Euro area manufacturing and services output rose to 49.6 in March from 49.3 the previous month, an initial estimate of purchasing managers will show, according to a Bloomberg survey.