Japan’s trade balance swung back to surplus in September, thanks in part to better performance from exports.
According to Japan’s Ministry of Finance (MOF), a trade surplus of 498.3 billion yen was recorded, higher than the 341.8 billion figure expected and a sharp turnaround from the 18.7 billion yen deficit previously reported in August.
The larger-than-expected surplus was helped in part by an improvement in exports, although they still remained down on the levels of a year ago in yen-denominated terms.
From September 2015, the value of exports fell by 6.9%, smaller than the 9.6% drop seen in August and forecasts for a decline of 10.4%.
It was the smallest year-on-year fall since March.
Despite the improvement registered in September, it was still the 12th month in a row that an annual decline had been reported, something that has been impacted by the twin headwinds of tepid global demand and significant strengthening in the Japanese yen.
This year alone the yen has risen by close to 16% against the US dollar.
The MOF reports that the value of exports to the US fell by 8.7% over the year, mirroring a similar decline to Asia which slid by 8.4%.
The value of exports to China — Japan’s largest trade partner — fell by a larger 10.6%, while those to the European Union rose by 0.3%.
On the other side of the trade ledger, the value of imports tumbled by 16.3%, although this too was an improvement on the 17.3% drop seen in August. It also topped forecasts for a decline of 16.6%.
Still, like the export figure, the value of imports has now logged a year-on-year decline in each of the past 21 months, dating back to December 2014.
That’s something that’s expected to continue, according to Marcel Thieliant and Mark Williams, economists at Capital Economics.
Writing before the release of today’s data, the pair said that export and import growth rates should remain “deeply in the red as the stronger exchange rate has reduced the yen-value of shipments”, according to Bloomberg.