Japan posted its first trade surplus in nearly three years in March as exports of cars and electronics picked up, an encouraging sign that economic growth may be back on track after a sluggish start to the year.
The 8.5 per cent annual increase in exports in March matched the median estimate in a Reuters poll and was faster than a revised 2.5 per cent increase in the year to February.
Weighed down by lower oil prices, imports by value tumbled 14.5 per cent, more than the 12.8 per cent drop expected, leaving Japan with a trade surplus for the first time since June 2012.
"Exports will continue to expand, and shipments to the United States will lead the way," said Hiroaki Muto, senior economist at Sumitomo Mitsui Asset Management Co.
"The trade surplus is also likely to grow larger as oil prices push down imports. This is a positive for economic growth. There are a lot of good signs in this trade data." Policymakers are keen to see exports accelerate because it is an important driver of corporate earnings, which they hope will eventually translate into higher salaries for workers and stronger consumer spending, helping the economy break out of years of deflation.
Some economists, however, tempered their optimism about the trade surplus, noting that oil prices were not falling as quickly as they were last year, which means that declines in the value of imports could slow.
"The surplus was due more to the decline in imports than due to the increase in exports," said Norio Miyagawa, senior economist at Mizuho Securities.
"We could have a few more months of surpluses, but it won't last for the year. Still, rising exports are a positive for the economy."
Exports to China, Japan's largest trading partner, rose 3.9 percent on-year in March due to higher shipments of non-ferrous metals and electronics, Ministry of Finance data showed on Wednesday.
That compared with a 17.3 percent decline in the year to February.
Exports to Asia rose an annual 6.7 percent in March versus a revised 1.0 percent year-on-year decline in February.
Shipments to the United States rose 21.3 percent, faster than a 14.3 percent gain in the previous month as Japan sent more cars to the world's largest economy.
The 14.5 percent import drop was the biggest decline since November 2009.
The trade balance came to a surplus of 229.3 billion yen ($1.9 billion), versus the median estimate of a 50.0 billion yen surplus.
Strong external demand is seen as key to bolstering the economy as it emerges from an unexpected recession last year.
While lower oil prices have caused inflation to stall, the Bank of Japan hopes the economy's gradual recovery will eventually push prices to its 2 percent target in or around fiscal 2015 without additional stimulus measures.
The 8.5 per cent annual increase in exports in March matched the median estimate in a Reuters poll and was faster than a revised 2.5 per cent increase in the year to February.
Weighed down by lower oil prices, imports by value tumbled 14.5 per cent, more than the 12.8 per cent drop expected, leaving Japan with a trade surplus for the first time since June 2012.
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Disappointing data on manufacturing and consumer spending have raised doubts about the strength of domestic demand, while weakness in China and Europe have clouded the export picture.
"Exports will continue to expand, and shipments to the United States will lead the way," said Hiroaki Muto, senior economist at Sumitomo Mitsui Asset Management Co.
"The trade surplus is also likely to grow larger as oil prices push down imports. This is a positive for economic growth. There are a lot of good signs in this trade data." Policymakers are keen to see exports accelerate because it is an important driver of corporate earnings, which they hope will eventually translate into higher salaries for workers and stronger consumer spending, helping the economy break out of years of deflation.
Some economists, however, tempered their optimism about the trade surplus, noting that oil prices were not falling as quickly as they were last year, which means that declines in the value of imports could slow.
"The surplus was due more to the decline in imports than due to the increase in exports," said Norio Miyagawa, senior economist at Mizuho Securities.
"We could have a few more months of surpluses, but it won't last for the year. Still, rising exports are a positive for the economy."
Exports to China, Japan's largest trading partner, rose 3.9 percent on-year in March due to higher shipments of non-ferrous metals and electronics, Ministry of Finance data showed on Wednesday.
That compared with a 17.3 percent decline in the year to February.
Exports to Asia rose an annual 6.7 percent in March versus a revised 1.0 percent year-on-year decline in February.
Shipments to the United States rose 21.3 percent, faster than a 14.3 percent gain in the previous month as Japan sent more cars to the world's largest economy.
The 14.5 percent import drop was the biggest decline since November 2009.
The trade balance came to a surplus of 229.3 billion yen ($1.9 billion), versus the median estimate of a 50.0 billion yen surplus.
Strong external demand is seen as key to bolstering the economy as it emerges from an unexpected recession last year.
While lower oil prices have caused inflation to stall, the Bank of Japan hopes the economy's gradual recovery will eventually push prices to its 2 percent target in or around fiscal 2015 without additional stimulus measures.