-Toru Suehiro, an economist at Mizuho
Japan's exports outperformed imports in March for the first time in almost three years, according to the Finance Ministry's data. Japan's overall exports soared 8.5% year-on-year, while imports plunged 14.5%, leading to a trade surplus of 229.3 billion yen, compared with the median forecast of 44.6 billion yen. Nevertheless, it is expected that the trade balance will return to deficit in April and be negative for the rest of the year.
Japan's imports of fossil-fuels surged after the 2011 Fukushima earthquake led to the closure of all the Japan's nuclear power plants. To compensate the shortfall, Japan started to import huge amounts of liquefied natural gas, coal and oil. The ballooning energy bill resulted in Japan's massive trade deficits. However, oil's more than 40% price dive in the past 12 months has considerably reduced that bill, while a weaker Yen has increased the value of exports. Exports have increased for seven straight months, as Japan's currency has lost around 16% against the US Dollar in the past 12 months, and is about 25% weaker since the Bank of Japan began the Qualitative and Quantitative Easing programme in April 2013. This has significantly boosted Japanese exports' competitiveness over the last few years, at a time when the US, the world's biggest economy, is on a gradual recovery track, boosting demand for Japanese goods.
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