Exports in March marked their first year-on-year decline in 16 months due to the March 11 disaster, the Finance Ministry said, but economists predict even sharper decreases because of production cuts and radiation fears.
Exports in March marked their first year-on-year decline in 16 months due to the March 11 disaster, the Finance Ministry said, but economists predict even sharper decreases because of production cuts and radiation fears.
Japanese exports stood at 5.8660 trillion yen ($70.87 billion) in March, down 2.2 percent from a year earlier, according to the ministry's provisional trade statistics released April 20.
Hard hit were exports of motor vehicles, which plummeted 27.8 percent, and semiconductors and other electronic components, which fell 6.9 percent.
Statistics for the period after the March 11 Great East Japan Earthquake showed that exports plunged 9.7 percent from the corresponding period last year.
"A large number of auto and cellphone parts factories are located in the Tohoku region, hardest hit by the disaster, and hence the big impact on the Japanese economy," said Mari Iwashita, chief market economist at SMBC Nikko Securities Inc.
The trade balance, or the difference between exports and imports, was 196.5 billion yen in March, down 78.9 percent year on year but still positive. However, the dominant view among economists is that the earthquake, tsunami and crisis at the Fukushima No. 1 nuclear power plant will have an even more significant impact.
Takahide Kiuchi, chief economist at Nomura Securities Co.'s Financial & Economic Research Center, said Japan may run trade deficits from April through June.
Exports and personal consumption are considered the two wheels of Japan's economy.
But domestic consumption remains weak following the earthquake and tsunami.
A number of economists predict gross domestic product to shrink in the April to June period.
Stable operations of plants are indispensable to a recovery in exports. But the shortage of parts, coupled with power shortages, make it unlikely for manufacturers to regain their pre-quake levels of production capacity in the foreseeable future.
Intensifying concerns overseas about radioactive contamination of Japanese products are also hindering Japan's exports.
"In March, shipment of stock allowed businesses to manage the situation. But because of sluggish output, more dire export figures are expected from April onward," said Satoru Ogasawara, an economist at Credit Suisse Securities (Japan) Ltd.
(This article was written by Hitoshi Kujiraoka and Hitoki Nakagawa.)