Japan’s Exports & the Global Soft Patch

There is mounting evidence that Japan’s devastating earthquake and tsunami on March 11 caused the global soft patch. Japanese exports plunged 14.0%, or $119.6 billion, during March and April to $735.3 billion (saar). That’s the lowest pace since February 2010. During February of this year, Japan’s exports total was at a cyclical high that nearly matched the previous record high during March 2008.

US imports fell in April, as US imports from Japan dropped 25.5% (on a not seasonally adjusted basis) led by a 69.4% plunge in autos. Also dropping, by 21.2% m/m, were parts imported from Japan needed to assemble motor vehicles in the US. Some of the recent weakness in Chinese imports was probably caused by the Japanese parts shortage too. China’s imports from Japan dropped 14.6% during April to $178.3 billion (saar), the lowest reading since September 2010. This total recovered some of the loss during May with a gain of 6.1%, but was still 18.2% below January’s record high.