Japan posted a 4 trillion yen ($36.7 billion) trade surplus for the fiscal year ended March, according to data released Thursday by the Ministry of Finance, the country’s first in six years.
The country had posted trade deficits since fiscal 2011 as fuel imports increased; nuclear power plant operations were suspended in the aftermath of the 2011 earthquake and tsunami. Lower oil prices and a stronger currency allowed Japan to climb back into the black in fiscal 2016.
The value of exports dropped by 3.5% on the year to 71.5 trillion yen, as exports of cars as well as iron and steel products dropped. The value of imports dropped 10.2% to 67.5 trillion, as imports of liquefied natural gas and petroleum decreased.
For the month of March, the surplus totaled 614 billion yen, preliminary data showed. That was the second straight month of surpluses, although the figure was down from the same month in 2016, which came in at 744 billion yen.
The March figure beat the QUICK consensus forecast of private-sector analysts, which predicted a surplus of 575 billion yen.
Total exports rose 12.0% in March from a year earlier to 7.22 trillion yen, as the value of exports to Asia hit a record high of 3.8 trillion yen. Exports to China contributed significantly, rising 16.4% on the year to 1.2 trillion yen, registering a year-on-year increase for five consecutive months. This was the second highest on record.
Exports to the U.S. increased 3.5% to 1.3 trillion yen.
Imports, on the other hand, climbed 15.8% to 6.61 trillion yen. But this was mainly due to the increase in import value of petroleum and coal from the rise in commodity prices.
The trade surplus in fiscal 2016 was “down to strong external demand and weak internal demand. It was also boosted by low oil prices,” wrote economists at SMBC Nikko Securities in a report. “The story of strong exports and weak imports will likely carry on in fiscal 2017. Exports are expected to remain on an expansionary path as foreign economies pick up. On the other hand … private consumption [in Japan] is sluggish and fixed investment from companies is likely to remain muted.”
“We cannot expect much from domestic demand, and therefore an acceleration in imports is unlikely,” read the report.