As expected Japan’s trade surplus disappeared in April as the full impact of the lost production from the March 11 quake, tsunami and the subsequent nuclear crisis at Fukushima hit the economy hard.
And yet the deficit wasn’t as large as some pessimists had forecast.
The trade deficit was 463.7 billion yen ($US5.7 billion) in April.
Exports fell 12.5% from a year earlier and imports rose 8.9%.
Shipments to the U.S. fell 23.3% in April from a year earlier, the biggest fall in 19 months.
Exports to China, Japan’s largest market, fell 6.8%, the first fall since October 2009 and shipments to Europe were down 10.7%.
Not surprisingly, the sectors responsible for the slide were cars, down 67% and electronics parts such as microchips dropping 19.0%
On the import side, the value of oil and related products jumped 62% compared with April, 2010.
It was the second month where the impact of the March 11 disasters had impacted Japan’s trade performance.
In March the trade surplus plunged 78.9% from a year earlier to 196.5 billion yen ($US2.37 billion).
Exports fell 2.2% to 5.87 trillion yen ($US70.9 billion), imports rose 11.9% to 5.67 trillion yen, on increased prices of oil and iron ore.
And a forecast yesterday from Toyota that its car production will be back faster than expected (as is Nissan’s while Honda’s lags), could be a sign that the worst of the impact on the economy and the trade account is already passing.
But first the economy and the country has to navigate the tough summer period and the expected power shortages and production cuts than will dampen activity and demand for a while.
Ahead of the trade figures release yesterday, the Japanese government maintained its pessimistic assessment of the economy in May, as the negative effects of the March 11 disaster have continued to dampen activity and demand.
"The Japanese economy has shown weakness recently due to the influence of the Great East Japan Earthquake," the Cabinet Office said in its monthly economic report for May, released Tuesday.
Although the government kept the overall assessment of the economy from the previous month, it downgraded its assessments of capital spending by firms, corporate earnings and housing starts, as the adverse impacts of the disaster extended to private domestic demand.
And Japan’s economic and fiscal policy minister says the nation’s economic growth is likely to slow down significantly this fiscal year because of a decline in industrial production after the March 11th disaster.
Kaoru Yosano said the growth rate will likely fall to about 0.6% or 0.7%, down nearly 1 percentage point from the previous estimate in December of last year.
The government last December predicted real growth of about 1.5% for fiscal 2011, which started in April. The new estimate will be finalised late next month and is around the latest estimate from the Bank of Japan.
Mr Yosano said businesses will take time to fully restore disrupted supply chains and resume normal output of cars and other products.
Power shortages and weak consumer sentiment are among the negative factors behind the slower economic growth.
Toyota Motor is reported to be stepping up production in Japan after securing parts needed, but in short supply, from other sources.
Media reports say the company will be normalising production levels earlier than expected as a result.
The firm plans to ramp up domestic auto-production to as much as 90% of targets set before the earthquake, due to better-than-expected improvements in part supplies.
Toyota previously said domestic output would remain at 70% of pre-earthquake expectations throughout June, The auto maker will produce around 12,000 units per day in June, which is about 80% more than it had forecast for May.
