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Japan's February exports grow 1.8% as trade recovery continues

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A continued growth in exports suggest the global recovery remains firm.

[TOKYO] Japan's trade recovery continued into February, with exports and imports registering growth.

HIGHLIGHTS

The value of exports increased 1.8 per cent in February from a year earlier (forecast +1.4 per cent). Imports grew 16.5 per cent (forecast +16 per cent). The February trade balance was a surplus of 3.4 billion yen (S$42 million) versus the forecast of 89.1 billion yen.

KEY TAKEAWAYS

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Market voices on:

A continued growth in exports suggest the global recovery remains firm. Yet a stronger yen poses some risks, making imports cheaper, weighing on inflation and cutting into exporters' profits. The risk of a trade war due to US President Donald Trump's tariffs is another potential source of downside pressure on Japan's economy.

ECONOMIST TAKEAWAYS

"In principle overseas economies are doing well, so I don't see exports losing steam," Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co, said before the data were released.

"Domestic demand is also quite solid, and capital expenditure especially should be growing as firms invest in assets to reduce labor hours."

"China is rapidly increasing its investment into IT, so exports to China should keep increasing globally in that area."

Other Details Japan's adjusted trade balance showed a deficit of 201.5 billion yen (forecast -90.8 billion yen).

Exports to China, Japan's largest trading partner, slipped 9.7 per cent in February from a year earlier.

Shipments to the US rose 4.3 per cent.

Those to the EU increased 11.5 per cent.

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