Containers at a shipping terminal in Yokohama, Japan on Oct. 18, 2021. Japan’s trade deficit surged in September as imports overwhelmed export growth.
Kiyoshi Ota | Bloomberg | Getty Images
Japan’s exports climbed 14.8% in April, the fastest pace since January and solidly beating expectations on a surge in semiconductor shipments.
The figure was sharply higher than the 9.3% expected from Reuters.
Imports increased 9.7% year-on-year, versus an expected 8.3% rise, according to government data. The country’s trade balance narrowed to 301.9 billion yen in April, from 643 billion yen in March.
The rise was powered by a surge in semiconductor shipments, which rose 41.6% year on year.
Jesper Koll, expert director at Tokyo-based financial services firm Monex Group, told CNBC that Japan’s dominance in semiconductors is in “machines that make machines.”
The demand for this is being powered by two forces: public infrastructure in the Global South, and growing demand from the U.S.-led AI boom.
“Takaichi is on a mission to promote Made-in-Japan machinery by raising public-support financing to Global South nations, with a big focus on Vietnam and India,” Koll added, referring to the Japanese Prime Minister.
Total exports to China — Japan’s largest trading partner — were up 15.5%, while exports to the U.S. rose 9.5%.
The yen strengthened marginally against the dollar, trading at 158.88.
GDP data on Tuesday had shown that net exports were still one of Japan’s main economic drivers, with the economy expanding 0.5% quarter on quarter and 2.1% on an annualized basis.
Japan is currently struggling with a weak yen, having spent a reported 10 trillion yen on intervening in the yen at end of April and the start of May. While a weak yen is likely to boost exports, it also causes domestic worries by pushing up imported inflation and weakening purchasing power.
Japanese core inflation data for April are due Friday. The measure accelerated for the first time in five months in March, rising to 1.8% as the Iran war fuels worries around energy prices.
