Japan sees first trade surplus on cheaper oil, China rebound

Japan posted its first trade surplus in six years in 2016 thanks to a rebound in exports late in the year and persisting low oil prices, though uncertainties over U.S. policy and global growth are overshadowing the recovery.

The 4.1 trillion yen (USD35.8 billion) surplus in 2016 compared with a 2.8 trillion yen deficit in 2015, the government reported yesterday. Exports fell 7.4 percent from a year earlier to 70.04 trillion yen ($617 billion) while imports dropped 16 percent to 66 trillion yen ($581 billion), the report showed.

But December’s data showed a strong rebound in exports to China and some other Asian countries, suggestion a recent uptick in growth in Asia’s biggest economy is filtering through supply chains across the region.

A weakening in the Japanese yen against the U.S. dollar since Donald Trump was elected president also increased the value of exports in yen terms. A dollar now buys about 114 yen, up from about 101 yen at the time of the Nov. 8 election.

In the full year, Japan’s trade surplus with the U.S. fell nearly 5 percent, to 6.8 trillion yen ($59 billion). Exports fell 7.1 percent from the year before to 14.1 trillion yen ($124.6 billion) and imports dropped 7.3 percent to 7.3 trillion yen ($64.4 billion), the report said.

Japan ran a 4.6 trillion yen ($41 billion) deficit with China, its largest trading partner, down by a quarter from a year earlier.

U.S. President Donald Trump’s decision to drop out of the Trans-Pacific Partnership trade pact, and his comments on imposing “border taxes” on some imports has added to uncertainties over U.S. trade policy.

A Japanese government spokesman said yesterday that Tokyo was discussing how to handle future trade negotiations such as the TPP and another Asian trade pact involving China, the Regional Comprehensive Economic Partnership. AP