Japan exports surge, trade deficit shrinks more than expected in Feb

Investing.com-- Japan’s exports grew more than expected in February, spurring a bigger-than-expected drop in the country’s trade deficit as demand in China and the U.S. remained robust. 

Exports grew 7.8% year-on-year in February, more than expectations for a rise of 5.3% but slower than the 11.9% jump seen in January.

This saw the country’s trade balance fall to a deficit of 379.4 billion yen, compared to expectations for a deficit of 810.2 billion yen and substantially lower than the 1.76 trillion yen deficit seen in Jan.

Shipments to China and the U.S. both grew in Feb and were the biggest contributors to the stronger trade balance. The two are Japan’s biggest export destinations, with an economic slowdown in China having pressured the Japanese economy over the past year with weak export demand.

But sustained stimulus measures from Beijing saw some signs of life in the Chinese economy over the past two months.

The smaller-than-expected trade deficit was also driven by a weaker-than-expected increase in Japanese imports, which grew 0.5% year-on-year in Feb, slower than projections for a rise of 2.2%. But the reading was Japan’s first instance of import growth in 11 months, and indicated that domestic demand was beginning to improve after being largely battered by sticky inflation and a weak yen over the past year.