Japan Export Growth Expected Higher

Japan’s export growth is forecast to have accelerated in February as shipments recovered from a Lunar New Year slowdown, which along with slower import growth is expected see the trade deficit narrow from record levels, a Reuters poll shows.

Lackluster exports have been a concern for policymakers, who are counting on shipments to help cushion an expected dent in domestic activity from next month when the sales tax rate rises to 8 percent from the current 5 percent.

Despite the sharp fall in the yen since late 2012, which has pushed up the cost of imports, there has not been a significant boost in export volumes, in part because of exporters’ reluctance to cut prices.

The Reuters poll found exports are expected to have risen 12.4 percent in February from a year earlier, led by brisk car shipments to the United States. If realized, it would be the first time since October that export growth has accelerated from the previous month.

Imports are forecast to have increased an annual 7.4 percent, the median estimate of 27 economists showed, leading to an expected trade deficit of 590.0 billion yen ($5.78 billion).

While that would be well below January’s record trade shortfall of 2.79 trillion yen, it would still extend the record run of deficits to 20 months. The Ministry of Finance will release the data on Wednesday at 8:50 a.m.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza