TOKYO (Reuters) - Japan’s exports rose in March at the fastest pace in more than two years as increased shipments of car parts and steel signaled that expanding overseas demand could help boost the country’s notoriously slow economic growth.
Exports rose 12.0 percent in March from a year ago, more than the median estimate of 6.7 percent annual growth. The data also showed Japan’s trade surplus with the United States narrowed, although this development is unlikely to wholly ease concerns about U.S. trade policy.
Japan’s exports are expected to continue rising as global economic growth gains momentum, but concerns about U.S. President Donald Trump’s pledges to adopt more protectionist trade policies cloud the outlook for Japan’s trade.
“Exports look pretty good, and we expect this to contribute to growth this year,” said Hidenobu Tokuda, senior economist at Mizuho Research Institute.
“One concern is Trump could start to take a tougher stance on trade with China, and by doing so he could also start to criticize Japan’s exports more openly.”
In terms of volume, exports rose 6.6 percent in March from a year ago, a second consecutive month of gains in another sign that global demand is picking up.
Exports to the United States rose 3.5 percent in March from a year ago due to higher shipments of car parts. That compares with a 0.4 percent annual increase in U.S.-bound exports in the previous month.
Japan’s trade surplus with the United States fell 8.1 percent in March from a year ago to 628.1 billion yen ($5.77 billion) on rising imports of liquefied natural gas and grains.
Exports to China rose 16.4 percent in March from a year ago, following a 28.2 percent annual surge in exports in February after the Lunar New Year.
Japan’s exports to Asia rose 16.3 percent year-on-year in March after rising an annual 21.0 percent in the previous month.
Japan’s imports rose 15.8 percent in March from a year ago, the largest increase since March 2014, as higher oil prices pushed up the value of energy imports.
The overall trade balance came to a surplus of 614.7 billion yen versus the median estimate for a 575.8 billion yen surplus.
On Tuesday U.S. Vice President Mike Pence put Japan on notice that Washington wants results “in the near future” from talks it hopes will open Japan’s markets to U.S. goods.
Pence was speaking in Tokyo where he attended the first U.S.-Japan economic dialogue with Japanese Deputy Prime Minister Taro Aso.
The next meeting will be held in Washington before year’s end, where the Trump administration could press for concessions on trade that could increase U.S. exports to Japan.
Reporting by Stanley White; Editing by Eric Meijer