Japanese trade data beat across the board in November, adding to signs that global economic activity is accelerating heading into 2017.
According to Japan’s Ministry of Finance (MOF), yen-denominated exports fell by just 0.4% compared to a year earlier, a far smaller contraction that the 10.3% drop of October and forecasts for a narrowing to -2%.
It was the smallest year-on-year contraction since September 2015.
The MOF said that exports to China — the nation’s largest trade partner — rose by 4.4% from a year earlier, the first increase reported since February this year.
Exports to the broader Asian region grew by 3.4% over the same period while those to the US contracted by 1.8%.
In October, the value of exports to Asia and the US fell by 9.9% and 11.2% respectively compared to the levels of a year earlier.
Recent weakness in the Japanese yen likely contributed to the improved trade performance with the US dollar gaining over 9% against the yen in November alone.
However, strength in both Chinese and US economic data in the second half of the year suggests that global economic activity is also improving, helping to boost demand for Japanese exports.
Indeed, according to the MOF, export volumes — excluding price movements — rose by 7.4% compared to the levels of a year earlier, underscoring the improvement in the global economy seen in recent months.
And the improvement wasn’t just limited to the exports side of the ledger.
The MOF said that the value of imports fell by 8.8% in the year to November, near-half the pace seen in October and well ahead of the 12.6% drop expected.
It was the first single-digit annual contraction since August 2015.
As a result of the improvement reported in both export and import levels, the national trade surplus narrowed to 152.5 billion yen, down from 496.2 billion yen reported in October.
It was also smaller than the 227.4 billion yen surplus expected by economists.