Japan’s trade deficit quadrupled year-on-year last month to US$14 billion, data showed yesterday, with a weak yen compounding surging imports as consumers rushed to buy ahead of a rise in the sales tax.
Japan imported ￥1.45 trillion (US$14 billion) in goods more than it exported in the month, the Japanese Ministry of Finance said, compared with a shortfall of ￥356.9 billion the previous year.
Exports rose 1.8 percent to ￥6.38 trillion, thanks to higher shipments of cars and processed fuel products, but imports grew at a much faster 18.1 percent to ￥7.83 trillion due to higher imports of crude oil and liquefied natural gas as resource-poor Japan raced to plug its energy gap.
For the fiscal year to last month, Japan logged a record trade deficit of ￥13.75 trillion.
A 17.3 percent rise in imports from the previous year to ￥84.61 trillion caused by a spike in energy bills after the Fukushima Dai-ichi nuclear power plant disaster in 2011 overwhelmed a 10.8 percent jump in exports to ￥70.86 trillion, according to data issued by the finance ministry.
Junko Nishioka, chief economist at RBS Securities Japan, attributed the jump in imports to expectations for a last-minute surge in consumer spending before the April 1 sales tax increase.
Compared with before the March 2011 disaster, “a weaker yen hasn’t increased export volume as much as it used to,” she said.
“That is to say Japanese firms aren’t as competitive as before. It remains difficult for exports to recover even if overseas economies improve. There is a risk of increasing imports and ballooning trade deficits,” she said.
Energy import needs soared after the 2011 Fukushima Dai-ichi crisis forced the shutdown of Japan’s nuclear reactors, which once supplied a third of the nation’s power.
A sharp decline in the yen, while good for exporters’ profitability, has also forced up the cost of importing.
The yen was an average 8.7 percent cheaper against the US dollar last month compared with the previous year, according to customs data.
Japanese domestic demand for gasoline and other products also picked up last month ahead of the April 1 sales tax increase from 5 percent to 8 percent.