Japan trade surplus dives 99% in March as coronavirus hits exports

[TOKYO] Japan's trade surplus dived 99 per cent in March from a year earlier as coronavirus woes hit exports to its major trading partners, official data showed Monday.

The March surplus came in at 4.9 billion yen (S$64.8 million), less than one percent of the year-before figure of 517 billion yen, according to the finance ministry.

"Exports to the United States and Europe as well as to China fell as the global spread of virus infections hit demand," said Takeshi Minami, chief economist at Norinchukin Research Institute.

"I'd say this is only the beginning," he told AFP, predicting exports would come under further pressure.

Shipments of automobiles and auto parts fell, while prospects are gloomy for semiconductors even though they managed to log growth in March, Mr Minami said.

"Production activities have stalled with sales of durable goods slack and corporate investment in plants and equipment halted," he said, adding it was difficult to find good export demand.

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Overall exports fell 11.7 per cent, a drop for the 16th consecutive month, with US-bound shipments tumbling 16.5 per cent and shipments to China falling 8.7 per cent. Exports to the European Union fell 11.1 per cent.

"Exports fell sharply in March and are set to plummet this quarter as economic activity in most of Japan's major trading partners has collapsed," said Tom Learmouth, Japan economist at Capital Economics.

Thanks to a gradual recovery in its activity, "China is likely to be a rare bright spot for external demand in Q2", he added in a note.

Japan's imports from the rest of the world fell 5.0 per cent as imports from China declined 4.5 per cent and those from the EU fell 9.7 per cent.

Imports from the United States rose 1.3 per cent, supported by purchases of aircraft, medical supplies and liquefied natural gas.

AFP