Japan last month logged its first trade deficit in five months, official data showed yesterday, as higher energy prices overwhelmed slower growth in exports due to the Lunar New Year.
The nation routinely falls into deficit in January due to the Lunar New Year celebrations in key trade partners such as China, which sees an extended holiday.
However, Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co in Tokyo, said that the export weakness would not last.
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“Exports are still on the recovery track,” he told Bloomberg News. “The global economy is steadily recovering.
“There’s no change to the view that Japan’s economy is driven by external demand while domestic demand is remaining weak,” he said.
Japanese Prime Minister Shinzo Abe has been trying to kickstart growth for more than four years, with a policy of spending, central bank policy easing and structural reform, but the outcome has been mostly disappointing.
Inflation and consumer spending are weak, and companies have been reluctant to boost wages in the world’s third-largest economy.
For last month, the trade deficit came to ¥1.08 trillion (US$9.6 billion), expanding 67.8 percent from the same month a year ago. The deficit was the first since August last year and marked a sharp reversal from a surplus of ¥640 billion in December.
Japan’s China-bound exports increased 3.1 percent last month, sharply lower than the 12.4 percent jump seen in December.
Imports from China rose 7.2 percent, resulting in Japan recording its 59th straight monthly deficit against Asia’s largest economy.
Overall exports rose 1.3 percent, falling short of the market expectation for a 5 percent rise, which was the median estimate of economists surveyed by Bloomberg.
Imports increased 8.5 percent, the first rise in more than two years, and came in higher than the market expectation of a 4.8 percent rise.
Increases in commodity prices, triggered by oil producers’ agreement last year to reduce production, also boosted energy bills for Japan, which depends mostly on imports from the Middle East.
The yen’s relative strength compared with a year ago was also seen weighing on Japanese exports.
Japan’s exports to the US fell 6.6 percent, led by weaker automobile and semiconductor shipments, while imports rose 11.9 percent, driven largely by gas and grains.
Asia-bound exports rose 6 percent, led by steel, ships and auto parts.
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