February 21, Japan's January export data released。The overall data exceeded expectations, providing support for Japan's domestic economy and opening the door for the Bank of Japan to gradually end its negative interest rate policy.。

Japan's exports rose 11 percent year-on-year in January, according to an official Japanese report..9%, exceeding market expectations of 9.5%。Imports fell 9% year-on-year as coal and LNG slumped.6%, the 10th consecutive month of decline, the market is expected to decline 8.7%。

Exports showed growth, which is a positive sign for Japan, as the economy unexpectedly fell into recession in the fourth quarter of 2023, previously affected by stagnant domestic spending.。

Evidence of relatively stable external demand may support the market view that the Bank of Japan can continue to move toward normalizing monetary policy, which many economists expect by April.。The Bank of Japan's policy board recently sought to reassure markets that the first rate hike since 2007 would not lead to fundamental changes as the policy environment would remain accommodative.。

"Demand for electronics and chipmaking equipment is recovering, and falling imports mean inflation is stabilizing and is good for consumer confidence."。Harumi Taguchi, chief economist at S & P Global Market Intelligence, said: "I think if the Bank of Japan can confirm the strong worker pay data, then it can maintain the position of raising interest rates in April."。"

Economist Taro Kimura said: "Strong shipments of automotive and semiconductor-related products continued to boost exports, offsetting the impact of weak domestic demand.。This suggests that external demand may avoid a third consecutive quarter of GDP contraction in the first quarter of 2024.。"

Compared with the same period last year, Japan's latest import and export data are generally more robust。Shipments of cars and auto parts, as well as chipmaking equipment, were the main drivers of the increase in Japan's export data in January.。Japanese exports to US up 15, driven by cars and medical equipment.6%, the 28th consecutive month of growth。In other key markets, Japan's exports to EU up 13.8%, while exports to China increased by 29.2%。

However, Kota Suzuki, an economist at Daiwa Securities, said the increase could be only temporary.。"Usually in January, a last-minute surge in demand before the Spring Festival holiday boosts exports.。"

The latest data also showed that Japan's seasonally adjusted exports fell 3.6%, suggesting that underlying trends may be more fragile than the overall data suggest。

Looking ahead, external demand is likely to fluctuate as some of Japan's major trading partners expect slower growth in 2024.。In its latest quarterly outlook, released last month, the Bank of Japan said it expected downward pressure on Japan's economy as the pace of recovery slows in overseas economies.。The United States, a major exporter to Japan, expects growth to slow to 1 percent this year..6%。

Takeshi Minami, chief economist at Norinchukin Research, said: "The US economy is slowing and Europe is in recession, so there is no reason to be optimistic about Japanese exports, which are weakening, which is a trend.。"

Since last year, there has been growing speculation that the Bank of Japan could withdraw from its negative interest rate policy as early as March or April this year if wages and prices grow fast enough.。However, recent weak data have raised concerns that Japanese companies may be reluctant to raise wages to combat inflation.。Data showed that Japan's manufacturer confidence index fell to -1 in February from + 6 the previous month, the first negative reading since April last year.。

The governor of the Bank of Japan reiterated last week that the central bank will continue to carefully analyze the data to judge whether the economy will continue to recover gradually.。