Japan’s trade deficit was a smaller-than-expected ￥180.8 billion (US$1.8 billion) last month as the weaker yen boosted exports.
The deficit reported by the Japanese Ministry of Finance yesterday was smaller than most forecasts and down from May’s deficit of ￥996.4 billion. Still, it was more than triple the ￥56.1 billion deficit recorded in June last year. That was largely due to higher costs for fuel imports since most of Japan’s nuclear reactors have been shut down since the March 2011 tsunami and nuclear disaster.
A weakening in the Japanese yen over the past nine months has helped export manufacturing, especially machinery and autos, and shipments have climbed at double-digit rates from a year ago.
Exports totaled ￥6.1 trillion last month, up 7.4 percent from a year earlier, while imports rose to ￥6.24 trillion. Exports to the US jumped nearly 15 percent to ￥1.13 trillion, while imports surged nearly 19 percent to ￥589.2 billion.
There were signs of a recovery in trade with crisis-stricken Europe.
Exports to the EU climbed 8.6 percent, while imports jumped nearly 17 percent. Imports from the Middle East, mainly of oil and gas, rose 8 percent to ￥1.12 trillion.
However, Japan’s trade with China has suffered due to tensions over conflicting claims to islands in the East China Sea.
Exports to China rose 4.8 percent last month to ￥1.08 trillion, while its imports from China surged 14.3 percent to ￥1.33 trillion, nearly doubling Japan’s deficit with the world’s No. 2 economy.
Partly to counter that trend, Japanese Prime Minister Shinzo Abe has made increasing Asian trade and cultivating ties with key resource exporters priorities of what he describes as his “economic diplomacy.”
Abe also committed Japan to joining a US-led trade initiative, the Trans-Pacific Partnership, which is envisioned as the beginning of what could become a region-wide trade bloc.
On Tuesday, Japan became the 12th nation to formally join the negotiations, underway in Malaysia.
The goal is to conclude talks this year, but negotiations could prove arduous, given resistance in Japan to eliminating protections for some industries, especially farmers.