File photo: The Japanese national flag flies in front of the container pier in the Tokyo port.
Toshifumi Kitamura | Afp | Getty Images
Japan’s exports rose for a seventh straight month, data showed on Wednesday, boosted by solid global demand and rising prices and for now defying any major impact from disruptions caused by the conflict in the Middle East.
Total exports by value rose 11.7% year-on-year in March, data showed, more than a median market forecast for an 11% increase.
Exports to the United States rose 3.4% in March from a year earlier, while those to China were up 17.7%, the data showed.
Imports grew 10.9% in March from a year earlier, compared with market forecasts for a 7.1% increase.
As a result, Japan recorded a trade surplus of 667 billion yen ($4.18 billion) in March, compared with the forecast of a surplus of 1.1 trillion yen.
While the closure of the Strait of Hormuz has choked Gulf energy shipments and disrupted global supply chains, higher export prices have supported Japan’s trade sector.
But concern has mounted among manufacturers about surging energy prices and the disruptions for oil and other materials eventually dragging down Japanese exports.
Shortages of naphtha, a key feedstock for petrochemicals, and related materials have already forced dozens of companies to announce order stoppages in recent weeks, despite government assurances of sufficient stockpiles.
Japan’s economy has continued to show signs of a modest recovery, supported by firm business investment and resilient exports, although growth momentum remains uneven amid external headwinds.
Analysts warn that rising oil prices linked to Middle East tensions could weigh on the economy by pushing up import costs and squeezing household purchasing power in an economy heavily reliant on energy imports.
The Bank of Japan is widely expected to keep interest rates unchanged at its next policy meeting next week, while maintaining a tightening stance as a weak yen and higher energy costs add to inflationary pressure, complicating the central bank’s efforts to balance price stability with economic growth.