LIke Australia, japan is being dragged out of its slowdown by booming Asia, particularly China.
Over half of Japan’s exports are now going to Asia, according to the March monthly trade figures released yesterday in Tokyo.
And Australia’s resource companies are feeding both ends of the recovery: China and Japan steel groups and processors.
Japan’s exports grew for a fourth month in March, evidence that the rapid recovery in Asian markets continues to drag the stuttering economy out of the slump.
Exports were up 43.5% from March 2009. Imports were up 20.7%, but exports fell more than 45% in March 2009, while imports were off 25%.
Exports rose more than 45% in February as well.
Exports to China jumped 47.7% from the previous March, dominating the huge rise in exports to the region.
Exports to the US rose a much slower 29.5%, while exports to Europe were up a more modest 26.7%.
It was another month where the size of the rebound in exports has failed to fully cover the depths of the plunge a year ago, while imports remain well under levels back in the same month of 2008 and 2007.
It’s another example of where many of the easy gains in this recovery have already been made, and from now on boosting earnings, exports and margins will become that much harder.
Exports to Asia were up 52.9% from a year earlier, imports were up a more sedate 16.5%.
Over the year to March, Asia accounted for more than 54% of all Japanese exports, but only just over 43% of imports.
In fact the growth of imports from Asia was less than the overall figure for March, which is another pointer to the stuttering and one-sided nature of this recovery, not only for Japan.
But the continuing 40% plus rise in imports does give support to the contention that the Japanese economy continues to grow.
The IMF forecast 1.9% growth this year for Japan in this week’s updated World Economic Outlook, up from the previous estimate of 1.7%.
That’s better than the slump last year of 5.2%, which was the largest fall in Japan in post World War 2 history.
"In Japan, exports have helped support a tentative recovery, but spillovers to autonomous domestic demand have so far been limited; domestic demand is likely to remain weak as a result of several factors, including the reemergence of deflation, continued excess capacity, and a weak labor market," said the IMF in its latest World Economic Outlook report.
"Continued yen appreciation in 2010 could dampen the contribution of net exports to growth, particularly in comparison with the rest of Asia. As a result, the outlook depends crucially on planned fiscal policy support and the global upturn," said the IMF.
In the report, the IMF said "the global recovery has evolved better than expected, with activity recovering at varying speeds, tepidly in many advanced economies but solidly in most emerging and developing economies".
The world economy, which fell 0.6% last year, will recover gradually in 2010 and 2011, growing by 4.25% and 4.3% respectively.
Tellingly, Japan is the only major economy where price deflation is forecast for 2010 and 2011.
That says all about the real state of the Japanese economy.
According to the IMF, Asia’s GDP is projected to grow by 7% in both years, while China’s growth will be 10% this year.
It’s that strong growth that is dragging Japan with it: the Japanese domestic economy is still in a slump, supported only by government spending and the trickle down of the rising level of exports.
In the fiscal year which ended March 31, exports fell 17.1% to 59.014 trillion yen, while the full-year trade surplus was 5.233 trillion yen after imports of 53.78 trillion yen, down 25%.
In the previous fiscal year, Japan posted its first trade deficit since the year ending in March 1981.
