Japanese exports surged in February, logging the largest year-on-year increase in over two years.
However, it was largely driven by one-off factors, keeping optimism over the result in check.
According to Japan’s Ministry of Finance (MOF), exports grew by 11.3% from the levels of a year earlier, above the 10.6% increase expected and a sharp improvement on the 1.3% growth rate seen in the 12 months to January.
It was the largest year-on-year increase since January 2015.
However, looking at the composition of the growth, it was almost entirely driven by a sharp lift in exports to China, the nation’s largest trade partner.
They grew by 28.2% from the levels of a year earlier, an outcome largely driven by distortions created by the timing of Chinese Lunar New Year celebrations this year rather than a sign that Chinese demand is surging.
Adding weight to this view, exports to China grew by only 3.1% in the year to January.
Elsewhere exports to the United States were almost unchanged from a year earlier, rising by 0.4%.
On the other side of the trade ledger, import growth slowed, increasing by 1.2% year-on-year after jumping 8.5% in January.
It was fractionally above the 0.6% increase expected.
Thanks to the surge in exports, the nation’s trade balance swung back to surplus, coming in at 813.4 billion yen. That was a sharp reversal on the 1.086 trillion yen deficit of January, but below the 822 billion yen surplus expected.