Japan’s Exports Rise More Than Forecast, Supporting Recovery

Japanese exports rose more than forecast in February, supporting the nation’s emergence from a recession last year.

The value of overseas shipments rose 2.4 percent from a year earlier, the government said. Imports fell 3.6 percent, leaving a 424.6 billion yen ($3.5 billion) trade deficit.

Sales abroad are a growing bright spot in a country that’s still struggling with weak spending by consumers and businesses at home. Falling oil prices are helping shrink the deficit, which swelled after Japan increased fossil-fuel purchases from abroad after the Fukushima disaster in 2011.

“Exports will probably continue to be the main driver for Japan’s economy in the first half of this year,” said Minoru Nogimori, an economist at Nomura Holdings Inc. in Tokyo. “With a recovery in wages, consumption may gain momentum and become the key driver for the economy in the latter half of the year.”

Exports fell by volume from a year ago, with the figures affected in part by the timing of Lunar New Year holidays, which were in February this year but in 2014 also included part of January.

Overseas shipments by value increased 9.4 percent in the first two months of this year from the same period in 2014, while volume increased by an average 4.1 percent, according to calculations based on data from the finance ministry. Imports by value fell 6.6 percent and by volume slipped an average 1.4 percent over the two months.

Yen Impact

The yen was little changed at 121.34 per dollar in Tokyo. It’s weakened 30 percent since Prime Minister Shinzo Abe came to power, boosting exporters and while increasing import costs.

Shipments of motor vehicles, electrical parts such as semiconductors and metal-working machines contributed to gains in February. Exports to the U.S. rose 14 percent from a year ago while sales to China dropped 17 percent.

“The value of imports will likely decrease in the months ahead due to declines in oil prices,” Nogimori said.

Brent crude has dropped about 53 percent since a peak in June last year.

Gross domestic product expanded an annualized 1.5 percent in the three months through December from the previous quarter, after shrinking for two quarters.