Japan Export Up On Improved Demand

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Japan Export Up On Improved Demand

Japan's Export Up By 7.8% On Improved Demand

February marks the 3rd month in a row in which the Japanese exports continue to show a healthy increase. This improvement in exports is due to the higher demand from the EU, China, and the USA.

The recent export data has also offered reassurance for the BoJ policymakers, who are trying to put the growth back into the economy.

Exports Beat 5.3% Forecast In February

In February, a 7.8% increase was seen in exports when compared with the same month last year. In fact, the growth was a lot higher than the 5.3% forecast made by a group of economists.

The timing of the trade data was also important as it came right after the BoJ ended its unconventional easing policy. In a sense, it appears that the Japanese economy appears to be all set to post a healthy growth this year.

Besides ending the negative rates, the BoJ also said goodbye to a lot of other unorthodox tools in its toolset for managing the economy. However, the rates will likely stay close to the zero figure as the Japanese economy is still fragile.

Just a year ago, Japan only narrowly escaped from a recession, which also shed light on the importance of exports. Despite the improvement, the fundamentals regarding the export are still very fragile.

As for the imports, a 0.5% increase on y/y was noted, while the forecast was for +2.2%. So, that's also a factor which hints at improved financials.

Despite the improvement, Japan's trade balance showed a deficit of $2.52 billion. However, this was a lot lower than the forecast.

After the news, the confidence of Japanese firms also touched its highest point over a 3-month period. At the same time, the sentiment in the service sector has also touched a 7-month high.

Although the exports have jumped in the last month, let's not forget that it all depends on the demand from the rest of the world, which is still very fragile.

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