Japan posts trade deficit
The deficit widened in March to JPY 621 billion, and analyst says it will persist in most months in 2012.
DBS Group Research said:
The trade data out this morning showed that exports rose 5.9% YoY in March, beating market expectations of 0.2%. Import growth, however, also significantly exceeded the consensus forecast, surging by as much as 10.5% YoY (vs. 7%). In the seasonally adjusted terms, export growth of 1.2% MoM was far outpaced by import growth of 6.3%.
As a result, the unadjusted trade balance swung back into a deficit of JPY 83bn in March (vs. a surplus of JPY 29bn in Feb). The adjusted trade balance stayed in deficit consistently in the first three months of this year, and the deficit widened again in March to JPY 621bn, compared to February’s 321bn and January’s 499bn.
The results in March trade data affirmed our view that trade deficit will persist in most months this year, with the recovery in exports largely offset by the synchronous rises in imports driven by strong demand on energy and capital goods imports.
The current account balance should remain in surplus this year, as the goods account deficit will be outweighed by a steady income account surplus, but the size of current account surplus risks falling short of expectations.
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