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Japan's March exports disappoint on strong yen, trade friction a risk

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Japan's exports rose less than expected in March due to a strong yen, raising some concern about the outlook for shipments on top of anxiety about Washington's criticism of the nation's large trade surplus with the United States.

[TOKYO] Japan's exports rose less than expected in March due to a strong yen, raising some concern about the outlook for shipments on top of anxiety about Washington's criticism of the nation's large trade surplus with the United States.

Wednesday's trade data comes during a two-day summit between US President Donald Trump and Japanese Prime Minister Shinzo Abe that threatens to put Japan in the crosshairs of Trump's protectionist trade policies.

While the trade surplus with the United States narrowed slightly by 0.2 per cent year-on-year to 623.1 billion yen (S$7.63 billion) in March, it was still sizable enough to draw criticism from Mr Trump.

The backdrop of rising trade tensions, especially around the US-China tariff standoff, have roiled financial markets as investors worried about their impact on global growth.

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Growth in export-reliant Japan could be undermined in any hit to world trade, or if the United States seeks measures to lower its trade deficit with the world's third-biggest economy.

In March, the data showed shipments grew 2.1 per cent from the same period a year ago, below the 4.7 per cent annual increase expected by economists in a Reuters poll. In February, exports grew 1.8 per cent.

Exports in March was supported by an increase in shipments of cars, and semiconductor manufacturing equipment, data showed.

Japan's exports to the United Sates rose 0.2 per cent year-on-year, much slower than a 4.3 per cent annual increase in February.

Since taking office last year, Mr Trump has pushed to re-write free-trade deals to secure more protection for US exports and jobs.

Mr Trump has imposed tariffs on steel and aluminium imports, which affect Japanese companies, and has also criticised Japan for its low number of US auto imports.

Economists expect Japan's exports to continue to expand at a slower pace than last year due to a tapering off in demand for semiconductors and electronic parts.

REUTERS