Investing.com– Japan’s trade surplus grew more than expected in December, boosted chiefly by resilient exports to the U.S. and China, although weaker-than-expected imports pointed to some softness in local demand.
Trade balance grew to a surplus of 130.9 billion yen ($840 million), compared to expectations for a deficit of 55 billion yen. Trade balance also swung into a surplus from a 110.3 billion yen deficit in November, government data showed on Thursday.
The turnaround was driven chiefly by stronger-than-expected exports, which grew 2.8% year-on-year in December- more than expectations for a 2.3% increase. But growth did slow from the 3.8% rise seen in the prior month.
Japan’s trade balance also benefited from softer-than-expected imports, although this also indicated that local demand remained subdued. Imports grew 1.8% in December, less than expectations of 2.6%, but picked up from the 3.8% contraction seen in the prior month.
Still, strong exports indicated that demand in top markets the U.S. and China remained relatively robust, although increased trade tariffs under U.S. President Donald Trump could shift this trend.
Exporters were also seen front-loading their shipments ahead of Trump’s presidency, given that he had threatened to impose steep trade tariffs from “day one” of his presidency.
While Trump made no such move when taking office this week, he did raise the prospect of increased tariffs on China, Mexico, and Canada. Trump had also floated the possibility of a universal import tariff in the U.S., which could bode poorly for countries with high trade exposure to the world’s biggest economy.
