In February, Japan witnessed a notable increase in exports, marking the third consecutive month of growth. This uptick, fueled by heightened demand from the U.S., China, and the European Union, sparks optimism among policymakers aiming to rejuvenate the economy following its subdued performance last year.
According to the Ministry of Finance, exports surged by 7.8% compared to the same period last year, outpacing the 5.3% rise anticipated by economists. This growth comes shortly after the Bank of Japan made a significant policy shift, ending eight years of negative interest rates and moving towards normalizing monetary policy. Despite this change, the central bank plans to maintain interest rates around zero to bolster the still-fragile economic growth.
Exports have been a focal point of concern for Japan's policymakers, especially given the economy's narrow escape from recession in the previous year. Meanwhile, imports saw a modest increase of 0.5% year-on-year in February, against expectations of a 2.2% rise. The trade deficit stood at 379.4 billion yen ($2.52 billion), significantly lower than the predicted 810.2 billion yen deficit.
Additionally, a recent Reuters poll revealed an uptick in confidence among major Japanese firms in March, reaching a three-month high. The service sector's sentiment also improved, hitting a seven-month peak.
