Japan’s trade deficit last month grew to its largest since July 2015 as a gain in exports was outpaced by a nearly 20 percent jump in imports.
The Japanese Ministry of Finance yesterday said that exports grew at an 8.2 percent annual pace.
In September, exports had fallen 1.2 percent from the previous year in the first decline for the world’s third-largest economy since 2016, due largely to natural disasters.
Japan racked up a trade deficit of ￥449 billion (US$4 billion), the preliminary data showed.
The politically sensitive trade surplus with the US fell 11 percent to ￥573.4 billion as Japan’s imports from the US jumped 34 percent, including imports of food, oil, steel, and other metals and machinery.
Exports to the US grew nearly 12 percent, mostly in autos, machinery, medical products and rubber, to ￥1.43 trillion.
That might help ease trade tensions after US President Donald Trump imposed punitive tariffs on billions of US dollars of Chinese exports.
China was Japan’s biggest export market last month, taking shipments worth ￥1.48 trillion, a 9 percent increase over the same month a year earlier, while Japan’s imports from China jumped 16 percent to ￥1.9 trillion yen.
While trade with both China and the US has remained resilient, despite tit-for-tat tariffs between the two countries, overall trade has been a drag on Japan’s growth and the outlook for exports is not promising, economists have said.
Japanese Cabinet Office data released last week showed that the Japanese economy contracted at annualized rate of 1.2 percent in the July-to-September quarter as consumer spending, investment and exports slipped.
Natural disasters have also taken a toll. That includes the closure of a major airport in the western Kansai area after a typhoon, and a major earthquake that hit the northernmost island of Hokkaido, causing fatal landslides and widespread blackouts.
Japanese Prime Minister Shinzo Abe’s deflation-fighting stimulus program of cheap credit has helped keep the economy growing for most of the past decade, despite stagnation in domestic markets as the population ages and shrinks.
SMBC Nikko Securities Inc chief economist Junichi Makino expressed optimism, saying that auto exports to the US remain strong, and tariffs imposed by the US on Japanese steel and aluminum exports are a tiny part of overall pan-Pacific trade.
The trade deficit might also level off as oil prices stabilize: Resource-scarce Japan remains heavily dependent on imports of oil, gas and coal.
However, further slowing of the Chinese economy or a global weakening in investment could cause broader damage, he said.
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