Japan’s trade deficit nearly doubled last month as a weaker yen sent the nation’s energy import bill soaring, despite a brightening export picture, official data showed yesterday.
The Ministry of Finance reported a bigger-than-expected deficit of ￥1.024 trillion (US$10.5 billion) last month, from ￥528.55 billion a year earlier.
That was the 13th straight month of shortfalls in what is the longest deficit spell in more than three decades.
The gap came even as the value of exports jumped 12.2 percent last month from a year earlier, powered by strong demand in the US and China, as well as Europe.
HIGHER ENERGY COSTS
“The deficit was much bigger than expected because the weak yen sent costs of energy imports up and contributed to the larger deficit,” Japan Research Institute analyst Hideki Matsumura said.
“But the data showed that exports are on course to recovery thanks to the weaker yen and strong demand in the US market,” Matsumura said.
“The deficit will likely shrink going forward as exports are expected to outpace imports due to the impact of the yen,” he added.
The yen has declined by about 20 percent against the US dollar since late last year, boosting exporters’ competitiveness overseas and inflating the value of their foreign-earned income.
The value of shipments to the key US market jumped 18.4 percent from a year earlier, while the data showed an upturn in exports to the troubled eurozone with a 16.6 percent year-on-year increase.
Exports to China rose 9.5 percent after a territorial dispute between Tokyo and Beijing that flared anew last year, hurting the Asian giants’ trade ties.
However, Japan’s energy import bills have surged since Tokyo shut down the country’s nuclear reactors following the crisis at Fukushima Dai-ichi in March 2011, as it turned to fossil fuel alternatives. Unusually hot summer temperatures likely contributed to pushing up demand for electricity, observers said.
Last week, the Cabinet Office said the economy expanded by weaker-than-expected 0.6 percent from the previous quarter. The pace of expansion also slowed on an annualized basis with a 2.6 percent increase, from a revised 3.8 percent jump in the first quarter.