Japan’s goods trade balance returned to the black in February, but exports continued to be weak amid sluggish demand from China, government data showed Monday.
The surplus of 339.0 billion yen ($3 billion) followed four consecutive months of deficit, according to a preliminary report by the Finance Ministry.
Exports fell for the third straight month, slipping 1.2 percent to 6.38 trillion yen. Imports declined 6.7 percent to 6.05 trillion yen, sliding for the second month in a row as global oil prices fell.
China-bound exports including automobiles and tech-related manufacturing equipment increased 5.5 percent from a year prior, but that failed to make up for a 17.4 percent plunge in January, when demand fell ahead of the Lunar New Year holiday and under pressure from a tariff war between the United States and China.
“We are clearly seeing the impact of the slowdown in China’s economy,” said Takeshi Minami, chief economist at the Norinchukin Research Institute.
“Exports are expected to continue falling for a while. That could deal a hit to capital spending and limit wage increases in labor negotiations,” he said.
Some economists believe weak exports could cause gross domestic product to contract in January-March, casting doubt on whether Japan’s economy can weather an upcoming hike in consumption tax. Prime Minister Shinzo Abe has said he will raise the tax to 10 percent from 8 percent in October while readying fiscal stimulus to ease the impact.
Imports from China, including clothing and televisions, shrank 15.8 percent, leaving Japan with a deficit of 131.2 billion yen to its largest trade partner.
Japan’s trade surplus against the United States, which has been the target of criticism from President Donald Trump, shrank to 624.9 billion yen as a 4.9 percent rise in imports such as aircraft outpaced a 2.0 percent increase in exports.
With the European Union, Japan had a trade surplus of 58.2 billion yen as exports grew 2.5 percent while imports edged up 0.5 percent.
Against the whole of Asia, Japan logged a trade surplus of 494.0 billion yen. Exports fell 1.8 percent while imports plunged 10.6 percent.
The figures were compiled on a customs-cleared basis.