Japan logs 1st trade surplus in nearly 3 years as cheap oil, recovery in exports tilt balance

Japan posted its first monthly trade surplus in nearly three years in March thanks to falling import costs from cheaper oil prices, along with a modest recovery in exports.

But the stronger-than-expected surplus is unlikely to persist, analysts said.

Japan relies on imports for virtually all of its oil, gas and coal. Oil prices already have begun to recover from the trough of below $50 they hit earlier this year and have yet to be reflected in Japan's imports.

"What's more, we expect the yen to weaken further in coming months, which should lift the cost of imports by more than the yen-value of exports. The upshot is that the trade balance is unlikely to remain in surplus for long," Marcel Thieliant of Capital Economics said in a commentary.

The Finance Ministry said Wednesday that preliminary data showed a 14.5 percent drop in imports in March from a year earlier, to 6.7 trillion yen ($55.6 billion). Exports climbed 8.5 percent from a year earlier to 6.9 trillion yen ($57.9 billion), leaving a surplus of 229.3 billion yen ($1.9 billion).

Based on preliminary data for October to March, Japan logged a trade deficit of 9.1 trillion yen ($76 billion) in the fiscal year from April 2014 to March 2015, it said. Exports rose 5.4 percent from the year before, while imports fell 1 percent.

Japan's trade balance slipped into deficits after the March 2011 earthquake, tsunami and nuclear disasters led to a closure of its nuclear plants. Costs for imports of oil and gas soared to compensate.

Japan's imports of oil, gas, coal and other fuels fell 37 percent in March from a year earlier, to 1.77 trillion yen ($14.8 billion).

The last time the country ran a monthly trade surplus was in June 2012.

The recovery in the U.S. economy, Japan's biggest export market, also helped boost shipments of cars and machinery. Japan's exports to the U.S. jumped 21 percent in March from the year before, while imports climbed 24 percent, leading to a surplus of 603 billion yen ($5 billion).

Japan's imports from China, meanwhile, fell almost 20 percent, partly due to the Chinese lunar new year holidays, while its exports to China rose almost 4 percent.