Japanese exports to the United States in April fell from a year earlier for the first time in 27 months, but strong shipments to Asia offset the drop, helping push Japan's trade surplus up more than 50%.
Data on Thursday underscored concerns that exports to the U.S., Japan's largest export destination, may be losing momentum, but economists said overall exports will likely remain firm and keep supporting the nation's steady economic recovery.
Exports to the U.S., where economic growth slowed to its weakest pace in four years in the first quarter, fell 4.8% from a year earlier to 1.34 trillion yen ($11.02 billion). That was partly due to a 7.5% fall in exports of automobiles, the first such decline in 25 months.
"Certainly the slower U.S. economy is affecting Japanese exporters," said Hiroshi Shiraishi, an economist at Lehman Brothers. "But on the whole, exports are holding up OK with the solid growth in Asia and Europe. Exports are continuing to grow, but the pace of growth seems to be moderating," he added.
Exports to Asia grew 11.1% from a year earlier to 3.21 trillion yen, rising for the 62nd month in a row, and those to China climbed 16.8% to 965.8 billion yen.
Financial markets reacted little to the data.
Total automobile exports rose 8.7%, with weak demand in the U.S. offset by robust auto sales in other parts of the world such as Europe, Asia, and Middle East.
Overall exports rose 8.3% from a year earlier to 6.64 trillion, while imports rose 3.5% to 5.71 trillion yen, data from the Ministry of Finance showed.
As a result, Japan's customs-cleared trade surplus expanded 51.8% in April from a year earlier to 926.7 billion yen, slightly less than analysts' median forecast of a surplus of 953.7 billion yen.
Some economists have been wary that a slowdown in the U.S. economy, which is still largely limited to a housing sector correction, could dent U.S. demand for Japanese goods.
But economists are generally optimistic about the outlook for the U.S. economy. "As the U.S. manufacturing sector is bottoming out, exports to the United States will likely pick up later in the year," said Azusa Kato, economist at BNP Paribas. "(U.S.) personal consumption also remains firm, so the slowdown in the U.S. economy has not reached a point that would alter the Bank of Japan's forward-looking monetary policy," she added.
A weak yen may have also given a boost to exports. The average dollar/yen rate for April was 118.27 yen, compared with 117.58 yen in April last year.
On a seasonally adjusted basis, the overall customs-cleared trade surplus decreased 8.2% from the previous month to 1.03 trillion yen, the data showed.
Japan is currently enjoying its longest period of expansion in the postwar era, albeit at a slower pace than previous booms, on the back of solid exports and robust corporate capital expenditures.
The economy expanded an annualized 2.4% in January-March from the previous quarter, marking the ninth straight quarter of expansion on the back of robust exports and personal consumption.