Japan's first trade surplus in five months and a revival of confidence among manufacturers has added to evidence the economy was growing again as the yen weakens and external demand picks up, reducing the need for further monetary policy easing. Exports to the United States in February rose at their fastest annual pace in more than a year, with auto exports jumping by more than a quarter, supporting the government's view the economy is picking up after contracting in late 2011.
The February trade surplus of 32.9 billion yen ($393 million) was a sharp turnaround from a record deficit of 1.476 trillion yen in January, and wrong-footed analysts who had been looking for a deficit of 120 billion yen. Providing comfort to the export-reliant corporate sector, the yen slumped to an 11-month low against the dollar in the wake of a surprise easing by the Bank of Japan last month. Exports to the United States surged 11.9 percent in February from a year earlier, the biggest rise since December 2010, powered by a 26.9 percent rise in auto exports. Still, total exports fell 2.7 percent from a year earlier, but that was much smaller than economists' median forecast of a 6.4 percent decline and the 9.2 percent drop in January.
Exports to Asia fell, although the pace of decline slowed as shipments to Thailand rebounded after the disruption caused by last year's flooding. Imports rose 9.2 percent in February from a year earlier, against a forecast for an 8.4 percent increase, boosted by high energy prices and strong demand for fuel to make up for idled nuclear power plants.