Exports, the driver of more than half the economy's fourth- quarter expansion, rose 2.3 percent from a year earlier, the Finance Ministry said today in Tokyo. The pace was slower than February's 8.7 percent and the 6.2 percent median estimate of 19 economists surveyed by Bloomberg News.
The U.S. housing recession caused shipments to Japan's largest market to fall for a seventh month, the longest losing streak in four years. The yen's gain to a 12-year high against the dollar exacerbated the declines. Shipments to China grew at the slowest pace since June 2005, indicating the effects of the U.S. slump may be spreading.
Imports rose 11.1 percent from a year earlier as oil prices surged to a record, helping the trade surplus shrink 30.2 percent to 1.12 trillion yen ($10.9 billion), the ministry said. Export growth was the slowest since May 2005.
The yen traded 14 percent higher against the dollar in March from the same month a year earlier, eroding the value of exports when repatriated and making Japan's goods less competitive abroad. About half of the nation's shipments overseas are settled in dollars.
The yen was at 103.05 per dollar as of 10:35 a.m. in Tokyo from 102.90 before the report was published. The currency rose to 95.76 on March 17, the highest since 1995.
Exports to the U.S. fell 11 percent in March from a year earlier, the steepest decline since November 2003. Shipments to the European Union climbed 3.6 percent, half the pace of the previous month. Sales to China increased 3.2 percent, and those to Asia rose 1.9 percent.
During the last U.S. contraction in 2001, Japan's exports fell and the country followed its biggest overseas market into a recession of its own. This time demand from Asia, led by China, has been cushioning the impact of the slowdown in Japan's largest export market. Exports to Asia rose to a record 3.7 trillion yen last month, today's report showed.
The International Monetary Fund forecast last month that, despite the slower U.S. growth, the global economy will expand 3.7 percent this year, matching the average over the past quarter century. Developing economies have picked up the slack left by the U.S.