Japan marks trade surplus as prices of imported oil drop, and exports of autos, computers grow
TOKYO – Japan racked up a trade surplus last month as exports of cars, computers and other goods grew, while imports dipped on falling oil prices.
Government data released Thursday showed that the trade surplus totaled 111.5 billion yen ($903 million) in October.
The price of oil is a key factor in Japan's trade figures as the country has few natural resources and imports almost all its oil, and with most nuclear power plants shut down since the March 2011 disaster, energy imports had been soaring.
That means the trade deficits the world's third-largest economy has marked in recent years were in contrast to its past decades-long, often criticized reputation as a giant exporter.
Despite the growth in car and computer exports, Japan's overall exports fell 2.1 percent in October from the previous year, but that drop was overshadowed by a decline in imports of 13.4 percent, according to the Finance Ministry's preliminary report. Exports to the U.S. grew, but fell to China, as that economy's growth gradually slowed.
Junichi Makino, chief economist at SMBC Nikko in Tokyo, believes, in the long term, the main factor that will put Japan's trade balance into the black is the U.S. economy.
The U.S. recovery appears to be on a solid footing now that seven years have passed since the Lehman Brothers collapse, which greatly hurt the economy, Makino said. Japan is thriving as an exporter of various goods to China, which in turn makes products that get exported to the U.S., he said in a report.
Progress on trade deals that Japan is working on with the U.S. and other nations may boost both imports and exports in the future.
The October surplus comes after Japan recorded a half year of deficits. Earlier this week, the government released data that showed the economy had contracted for July-September, sending Japan into a technical recession. The Bank of Japan policy board is meeting this week, but opinion is divided on whether further stimulus action will be taken.
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