Japan Exports Soar to Record in Dec; China Shipments Make Long-Awaited Rebound

Reuters

13:50 JST, January 24, 2024

TOKYO, Jan 24 (Reuters) – Japan’s exports surged to record highs in December, with shipments to the U.S. soaring to their strongest-ever level while those to China were also robust, logging their first rise in more than a year.

The better-than-expected data comes at a time of heightened concern about a faltering economic recovery in China and its potential to drag on the global economy.

Exports from the world’s third-largest economy climbed 9.8% to 9.65 trillion yen ($65.1 billion) last month from the same period a year earlier, finance ministry data showed on Wednesday.

That beat a consensus estimate of 9.1% from economists in a Reuters poll and followed a 0.2% contraction in November.

Economists said, however, that it was unclear whether Japan’s lackluster economy – which has seen factory activity shrink for eight straight months – could bank on a sustainable boost from a recovery in exports.

“Exports were strong but it might only be a bounceback after the fall in November. The pace of economic growth in the U.S. and Europe seems to be slowing a bit and China has only just bottomed out so any recovery in exports is likely to be a weak one,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

Exports to China – Japan’s biggest trading partner – climbed 9.6% to 1.77 trillion yen ($12 billion) in December, the second-largest amount on record. Shipments of semiconductor manufacturing equipment and cars led the expansion but exports of chip and other electronic components tumbled 22%.

Exports to the United States surged 20.4%, marking 27 consecutive months of growth. Shipments of cars and auto parts as well as construction and mining equipment propelled the increase.

Japan’s imports fell 6.8% in December, more than the median estimate for a 5.3% decrease. That helped the trade balance come to a surplus of 62.1 billion yen, trumping the median estimate for a 122.1 billion yen deficit.

For the whole of 2023, Japan logged a trade deficit of 9.29 trillion yen, marking three consecutive years of deficit but shrinking by 54.3% compared to the previous year.