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(Bloomberg) — Japan’s trade balance unexpectedly swung into a surplus in June — its first since July 2021, as imports fell 12.9% and export growth accelerated slightly.
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On Thursday, the Finance Ministry said the trade surplus amounted to 43 billion yen ($308 million). Analysts had expected a deficit of 46.7 billion yen. Exports rose 1.5%, led by shipments of automobiles and construction machinery. Imports decreased by 36.2% in crude oil and decreased by 37.5% in coal.
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The surplus will come as a positive sign for Japanese companies as they continue to recover from the impact of the Covid pandemic. Confidence among businesses in the country improved in the Bank of Japan’s latest quarterly Tankan report earlier this month, supporting the central bank’s view that the country’s economy is gradually recovering.
What does Bloomberg Economics say…
Healing supply chains may have allowed automakers to build and ship more cars. The decline in imports likely reflects lower energy prices.”
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– Asian Economists Group
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The report highlighted the mixed demand situation around the world. Exports to the United States and Europe rose 11.7% and 15%, respectively, while shipments to China fell 11%. Data earlier this week showed that the pace of China’s economic expansion lagged behind expectations in the second quarter due in part to slower consumer spending.
The yen was 6.8% weaker on average in June than a year earlier, a factor that inflates the value of imports. But energy prices have fallen at a faster rate, reducing the value of imported fuel.
(Updates with details about the yen. Corrected an earlier version of the story to show the correct imports and regional breakdowns.)