Japan recorded first trade surplus since 2012 in March, however it looks extremely vulnerable to any adverse movements.
- Merchandise trade balance registered ¥ 229. 3 billion surplus, surpassing expectation of around ¥ 50 billion.
- Exports rose 8.5% y/y while imports dropped about 14.5% in March from a year ago.
- Exports have been rising since September last year, after it dropped over tax rise by Shinzo Abe’s government.
Bank of Japan (BOJ) officials have finally something concrete to boast for. Looking at the export trend it remains ultra-clear that weaker yen is helping out exports as a whole since 2012. However, this is the first time Japan is registering trade surplus since the purchase program was announced by BOJ in late 2012.
The main reason for such, despite economic prowess Japan remains an energy poor nation, importing most of its energy demand.
Fukushima Daichi nuclear disaster after massive Tsunami of 2011, left it ever more vulnerable to energy swings.
With weaker yen in place Japanese economy remains very vulnerable to rise in energy price that might prompt Bank of Japan to reconsider the monetary policies.
The material has been provided by InstaForex Company – www.instaforex.com