Japan just logged its largest trade surplus in 6 years

Photo: Keith Tsuji/ Getty Images.

Japan recorded its largest trade surplus since March 2010 in April, rising to 823.5 billion yen from 755 billion yen in March.

It was the the third trade surplus recorded in a row, the longest consecutive stretch since late 2010, and was well ahead of forecasts for a narrowing to 492.8 billion yen.

Though the nation is now regularly recording trade surpluses — something it failed to achieve once between July 2012 through to February 2015 — it was largely driven by the value of imports collapsing faster than the value of its exports.

Compared to a year earlier, the value of imports slumped by 23.3%, well below forecasts for a decline of 19.0%.

Not only was it far steeper than the 14.9% contraction seen in the 12 months to March, it was also the largest annual contraction since October 2009, shortly after the onset of the global financial crisis.

Helping to explain the continued run of trade surpluses, the value of Japanese exports fell by a far smaller margin over the past year, declining only 10.1%.

Although smaller than the contraction registered in imports, the figure was below expectations for a decline of 10% and was steeper than the 6.8% annual decline previously seen in March.

By destination, the value of exports to Asia fell by 11.8% compared to April 2015, down from a contraction of 9.7% in March.

Exports to China fell by 7.6%, fractionally below the 7.1% contraction of March, while those to the United States declined by 11.8%, having fallen 5.1% previously.

Though a thoroughly disappointing set of figures, and a continuation of the recent trend, the data likely felt the impact of a series of earthquakes which shook the southern Japanese island of Kyushu in April, a major manufacturing hub in Japan.

Plant shutdowns at some major firms, including motoring giant Toyota, will likely affect the data in the months ahead.

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