(Bloomberg) -- Japan’s exports shrank for a fourth straight month in March as weakness in global demand continued to weigh on the economy.

The value of shipments abroad declined 2.4 percent from a year earlier, according to the finance ministry. Economists had forecast a 2.6 percent drop, following a 1.2 percent fall the previous month.

Key Points

  • Japan’s policy makers can ill afford any weakness in exports that saps economic momentum as the nation heads toward a sales tax hike that could stunt domestic consumption.
  • The latest figures all but confirm that exports will drag on the economy in the January-March period, for the second time in three quarters, meaning that Japan must rely on domestic demand to hold up growth.
  • The March data is seen as the most reliable gauge of shipment strength this year given the seasonal holiday factors that distort export figures in large parts of Asia in January and February.
  • The trade data comes as representatives of the U.S. and Japan wrapped up their first two days of official discussions over a trade deal in Washington. President Donald Trump has called for a reduction of the U.S. trade deficit with Japan and more access to Japanese markets.

What Bloomberg’s Economists Say

"Some positive economic signals from China could mean exports may stop falling, but we doubt external demand is strong enough to spur a rebound. ... The biggest risk going forward -- U.S. protectionism."

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  • Imports rose 1.1 percent in March, compared with a 2.8 percent gain predicted by economists.
  • The trade balance was a 528.5 billion yen surplus in March, compared with a median forecast for a 363.2 billion yen surplus.
  • Exports to China decreased 9.4 percent in March, while shipments to U.S. climbed 4.4 percent and sales to Europe advanced 7.3 percent.

To contact the reporter on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net

To contact the editors responsible for this story: Brett Miller at bmiller30@bloomberg.net, Paul Jackson

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