The March surplus came in at 4.9 billion yen ($45.5 million), less than 1% of the year-before figure of 517 billion yen, according to the finance ministry.
“Exports to the United States and Europe as well as to China fell as the global spread of virus infections hit demand,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“I’d say this is only the beginning,” he told Agence France-Presse, predicting exports would come under further pressure.
Shipments of automobiles and auto parts fell, while prospects are gloomy for semiconductors even though they managed to log growth in March, Minami said.
“Production activities have stalled with sales of durable goods slack and corporate investment in plants and equipment halted,” he said, adding it was difficult to find good export demand.
Overall exports fell 11.7%, a drop for the 16th consecutive month, with US-bound shipments tumbling 16.5% and shipments to China falling 8.7%. Exports to the European Union (EU) fell 11.1%.
“Exports fell sharply in March and are set to plummet this quarter as economic activity in most of Japan’s major trading partners has collapsed,” said Tom Learmouth, Japan economist at Capital Economics.
Thanks to a gradual recovery in its activity, “China is likely to be a rare bright spot for external demand in Q2,” he added in a note.
Japan’s imports from the rest of the world fell 5% as imports from China declined 4.5% and those from the EU fell 9.7%.
Imports from the United States rose 1.3%, supported by purchases of aircraft, medical supplies, and liquefied natural gas. – Rappler.com