MNI BRIEF: Japan Exports Continue To Rise, Despite BOJ View

Japanese exports recorded their 25th straight month of gains and the country's trade deficit shrunk in March, despite the Bank of Japan's projection of weaker exports due to the rising cost of petroleum imports and the slowing global economy.

Exports rose 4.3% y/y in March, down from February's 6.5%, while imports increased 7.3% y/y for the 26th straight gain following the 8.3% recorded last month, Ministry of Finance data released Thursday showed. Japan's trade deficit shrunk to JPY754.5 billion – the 20th straight deficit – from February's JPY898.1 billion.

BOJ officials expect the slowing U.S. economy increasingly to weigh on exports and production (See MNI BRIEF: BOJ Keeps Recovery View; Cuts Exports, Production).

According to the data, automobile exports rose 38.3% y/y in March, up from 23.5%, showing eased impacts of supply-side restrictions and increased car production. Exports to China, Japan's largest trading partner, fell 7.7% in March for the fourth straight drop following a 10.9% decline in February. Automobile exports to China fell 62.7%, widening from the 34.2% drop in February. Exports to the U.S. rose 9.4% for the 18th straight rise following 14.9% in February, driven by a 59.9% surge in automobile exports.