A rebound in Japan’s exports in January failed to keep pace with growth in imports, leaving a record 1.63 trillion yen ($17.4 billion) trade deficit for the month.
Provisional data released Feb. 20 shows that exports from the world’s third-biggest economy rose 6.4 percent to 4.8 trillion yen in January from a year earlier, the first year-on-year increase in eight months, while imports jumped 7.3 percent to 6.43 trillion yen.
The trade deficit in January was the largest since comparable statistics became available in 1979.
Imports of liquefied natural gas, fuel for thermal power generation, rose 11.4 percent from a year earlier. LNG imports amounted to 8.23 million tons in volume and 606.77 billion yen in value, both monthly records.
A weakening in Japan’s currency over the past few months has helped boost export shipments by making products more price-competitive overseas. But it has also inflated the value of resource-scarce Japan’s imports of crude oil and other commodities, which offset a recovery in demand for Japanese-made vehicles and machinery.
This trend is hindering Japan’s long-time strategy of relying heavily on exports to drive growth and adding to pressure to find fresh momentum through stronger domestic demand at a time when the workforce is aging and shrinking and corporate investment remains feeble.
Prime Minister Shinzo Abe took office in December, vowing to boost the economy by restoring Japan’s export competitiveness, while at the same time stimulating demand at home through higher public works spending. He also has promised to push ahead with politically tough reforms needed to sustain growth in the longer term, though such efforts have not made much headway in the past.
Trade with the United States and major Asian trading partners rose as the global recovery strengthened and the economic impact of friction with China over a territorial dispute appeared to recede. But trade with European countries remained weak, with a 6 percent decline in exports from a year earlier. Imports from Western Europe climbed 6.3 percent.
Exports to the United States jumped 11 percent from the year before to 839.8 billion yen, while imports rose 5.8 percent to 521.1 billion yen. That boosted Japan’s surplus with the United States by 20 percent from a year earlier to 318.7 billion yen.
Exports to China climbed 3 percent but imports also surged, leaving a deficit of 654.6 billion yen, up 11 percent from the year before. Shipments of Japanese products to other Asian nations rose sharply, however, as manufacturers stepped up efforts to boost production and sales outside of China. Exports to Taiwan jumped 28.8 percent from a year earlier, to Thailand by 23.7 percent, to Vietnam by 21 percent and to Hong Kong by nearly 12 percent.
Japan’s imports of crude oil and other fuel rose 8.8 percent to 2.26 trillion yen, accounting for over a third of its total import bill, pushed higher by the yen’s weaker purchasing power and rising prices.
Exports of transport equipment climbed 25 percent, mainly due to rising exports of auto parts, while exports of machinery increased 18 percent.
Japan’s trade deficit rose to a record 6.93 trillion yen in 2012 as fuel imports surged and a bitter territorial dispute with China provoked anti-Japanese riots, hammering its exports.
The trade deficit narrowed to 641.5 billion yen in December from the 954.8 billion yen shortfall in November. That was despite a 5.8 percent drop in exports for the month.
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