Japan exports surge 14.8% in April as chip shipments jump despite Iran war disruptions – Firstpost

Japan’s exports rose for an eighth straight month in April, beating market expectations as booming semiconductor shipments and resilient demand from the United States and China helped the world’s fourth-largest economy withstand supply disruptions caused by the ongoing Iran conflict.

Government data released on Thursday showed exports by value climbed 14.8 per cent from a year earlier, sharply above the 9.3 per cent increase forecast by economists polled by Reuters and accelerating from a revised 11.5 per cent rise in March.

The strong export performance comes days after data showed Japan’s economy expanded at an
annualised pace of 2.1 per cent in the January–March quarter, underlining how overseas demand and domestic consumption have continued to support growth even as geopolitical tensions disrupt global trade routes and energy supplies.

The latest trade figures suggest Japan has so far managed to shield its manufacturing sector from the worst effects of the US-Israeli war with Iran, despite higher shipping costs and severe volatility in energy markets.

A major driver behind the export growth was semiconductor-related demand. Shipments of semiconductors and chip-making equipment surged 41.6 per cent year-on-year in April, reflecting continued global investment in artificial intelligence infrastructure, consumer electronics and industrial automation.

Exports to the United States rose 9.5 per cent from a year earlier, while shipments to China — Japan’s largest trading partner — jumped 15.5 per cent, highlighting steady demand from the world’s two largest economies.

Imports also increased, rising 9.7 per cent in April from a year earlier, above expectations for an 8.3 per cent gain. However, Japan’s crude oil imports plunged 64 per cent, the steepest drop since 1980, according to a finance ministry official.

The decline reflected severe disruptions in Middle Eastern supply routes following instability around the Strait of Hormuz, a critical artery for global oil shipments. Increased crude imports from the United States partially offset the fall.

Japan recorded a trade surplus of 301.9 billion yen ($1.90 billion) in April, reversing market expectations for a deficit of 29.7 billion yen.

The data also highlights the growing importance of semiconductors to Japan’s economic recovery as the country seeks to strengthen its role in global chip supply chains amid intensifying competition between the U.S. and China.

Japan has been investing heavily in semiconductor production through subsidies and partnerships with global chipmakers, including projects involving Taiwan Semiconductor Manufacturing Company and domestic firms.

The trade numbers arrive at a sensitive time for Japanese policymakers. While a weak yen has supported exporters by making Japanese goods more competitive overseas, it has also increased imported inflation and weakened household purchasing power.

The yen traded marginally stronger at around 158.88 against the U.S. dollar after the release of the data.