Japan's exports rose for a sixth straight month in March, data showed on Thursday, as the threat of sweeping U.S. tariffs drove Japanese companies to ramp up shipments while sparking concerns about the outlook of the country's export-reliant economy.
Total exports rose 3.9% year-on-year in March, Ministry of Finance data showed, less than a median market forecast for a 4.5% increase and slowing from an 11.4% rise in February.
Shipments to the United States, Japan's biggest export destination, rose 3.1% in March from a year earlier, including a 35.8% jump for electronic parts, a 29.7% increase for pharmaceuticals and a 4.1% rise for autos. Shipments to China were down 4.8%, the data showed.
Takeshi Minami, chief economist at Norinchukin Research Institute, said the impact of front-loading shipments to the U.S. ahead of the tariffs was not overly pronounced for autos because it was difficult for carmakers to change production plans quickly.
"Looking ahead, the U.S. tariffs could not just slow exports but also drag down wages at export-oriented companies," Minami said. "That could risk derailing the scenario that real wage growth spurs a modest economic recovery driven by domestic consumption."
U.S. trade tariffs are shaking up Japan's industrial supply chains, particularly for automobiles, the country's biggest export item.
Japan exported 21 trillion yen worth of goods to the United States last year, with automobiles representing roughly 28% of the total.
It is seeking full removal of the additional tariffs. Trump said on Wednesday there was "big progress" when he made the surprise move to negotiate directly with Japanese officials in Washington about the barrage of tariffs he has imposed on global imports.
Japan produces 9 million cars annually at home and ships about 1.5 million of them to the United States. Furthermore, Japanese automakers export more than 1.4 million cars to the United States from Mexico and Canada.
Scrambling to mitigate the impact, automaker Nissan (7201.T) plans to cut Japanese production of its top-selling U.S. model, the Rogue SUV, over May-July.
Imports grew 2% in March from a year earlier, compared with market forecasts for a 3.1% increase.
As a result, Japan ran a trade surplus of 544.1 billion yen ($3.84 billion) in March, compared with the forecast of 485.3 billion yen.
($1 = 141.8000 yen)
