Japan’s export growth jumped 45.3% in February from the same month in 2009, driven by surging demand from Asia and China, with help from growing demand from elsewhere.
But the February export total was 1.7% less than January’s total, and the size of the surge flowed directly from the comparative month of February last year, when exports slumped by a record 49.4%.
In fact you’d be entitled to wonder if Japan’s recovery, which is directly linked to exports and government spending, is moving
So the real story is one of three parts: yes there’s a recovery, thanks mostly to China, but it’s not growing from month to month, and the improvement still left exports below the February 2008 level.
The year-on-year increase in February was still faster than January’s 40.8% rate.
The rebound was driven by Asia, especially China, Japan’s largest overseas customer.
But the Lunar New Year in China. Taiwan, Singapore and Korea did see a slowing in the rate of growth to some of these destinations. The lunar New Year was in January last year, which made the figures for this January look better (as did the intense recession).
Exports to Asia advanced 55.7%, down from the 68.1% gain the previous month.
Shipments to China were up 47.7%, down from the 79.9% rate in January.
Shipments to North America rose 50.2% from February 2009, more than tripling Japan’s surplus with the region. Exports to Russia also saw strong growth, rising 90.2% year on year.
Sales to Europe rose 19.7%, the third consecutive increase, but the much slower rate of growth told us more about the still soft demand and the weak level of activity in the European economy.
Car exports more than doubled to rise by 105%, while car parts exports urged 12.17% from February 2009. Iron and steel exports were stronger, up 81% from a year ago (when they fell very, very sharply as global demand crashed).
Imports climbed 29.5% in February from a year earlier, resulting in a trade surplus of 651 billion yen (or $US7.2 billion).
LNG imports were up 14.8%, coal imports up 13.6% and iron ore imports jumped more than 28% in February from a year ago.
So the recovery in demand in Japan is real, just not enough perhaps?
That was solid, but the surging spot price for iron ore, coal and higher prices for oil and gas would have made these look better.
The Japanese government last week raised its assessment of the economy for the first time in eight months, saying the recovery is beginning to lift corporate earnings, home building and consumer spending.
But the rebound hasn’t been strong enough to end the deflation, which is squeezing profit margins and discouraging spending.
The Bank of Japan last week doubled a credit program to 20 trillion yen to help spur consumer spending and inflation that have fallen for 11 consecutive months.
If the oomph goes out of exports for Japan, then the economy’s prospects will not improve.
