Japan’s 2020 exports fall 11%, largest drop in 11 yrs due to pandemic

The annual drop was the sharpest since a 33.1 percent dive logged in 2009 in the wake of the global financial crisis, according to a preliminary report by the Finance Ministry. Exports in 2020 stood at 68.41 trillion yen ($660 billion), the lowest level since 63.75 trillion yen in 2012.

By item, the country's car exports plummeted 20.0 percent from 2019, the biggest fall since a 51.3 percent tumble in 2009. Auto parts exports declined 19.1 percent.

Imports dropped 13.8 percent to 67.73 trillion yen, the steepest decrease since a 15.8 percent slide in 2016, mainly due to the falling price of crude oil and other energy resources. The figure was the smallest since 66.04 trillion yen in 2016.

Both exports and imports were down for the second consecutive year. The falls left Japan with a goods trade surplus of 674.73 billion yen, the first black ink in three years.

As overseas demand was dampened throughout last year by the global spread of the virus, first detected in the central Chinese city of Wuhan in late 2019, Japan's monthly exports posted double-digit percentage falls on year between March and August.

But in December alone, the Finance Ministry said, exports saw the first year-on-year rise in 25 months, in a sign that the initial impact of the pandemic has eased. They grew 2.0 percent from a year earlier to 6.71 trillion yen, ending the longest streak of monthly declines on record, with those to China soaring 10.2 percent.

Imports in the reporting month were down 11.6 percent to 5.96 trillion yen, down for the 20th straight month, leading the country to post a goods trade surplus of 751.01 billion yen, the sixth consecutive month of black ink.

«Double-digit percentage declines of exports and imports in 2020 reflect the magnitude of the virus impact on the global economy,» said Yuichi Kodama, fellow chief economist at the Meiji Yasuda Research Institute.

Kodama said Japan's shipments will «remain in a severe situation in the next few months» partly due to strict restrictions on economic activity in Europe amid resurgent virus infections, but pickup trends in China and the United States are likely to continue.

«As for 2021, although there is still a high level of uncertainty and the economic outlook greatly depends on progress of (COVID-19) vaccinations, robust recoveries by the global economy and Japan's exports are expected, so we don't have to be too pessimistic,» Kodama said.

In 2020 by country, the goods trade surplus with the United States dropped 21.6 percent to 5.19 trillion yen, logging the largest decline since a 47.8 percent drop in 2009.

Exports to the world's biggest economy decreased 17.3 percent to 12.61 trillion yen, weighed down by a 19.2 percent tumble in car exports. Imports were down 14.0 percent to 7.43 trillion yen as demand for aircraft and their engines shrank.

Exports to China climbed 2.7 percent to 15.08 trillion yen, as they fully recovered from a plunge at the start of the year, boosted by brisk shipments of items such as refined copper and hybrid cars.

Imports from the world's second largest economy dipped 5.3 percent to 17.48 trillion yen, led by falls in clothing, with Japan seeing a trade deficit of 2.39 trillion yen.

Across Asia, including China, Japan's trade surplus expanded 18.0 percent to 4.62 trillion yen, with exports down 5.1 percent to 39.22 trillion yen and imports sagging 7.5 percent to 34.61 trillion yen.

With the European Union, Japan saw a trade deficit shrink 1.5 percent to 1.33 trillion yen, as exports fell 14.6 percent to 6.46 trillion yen and imports dropped 12.6 percent to 7.79 trillion yen.