Japan unexpectedly slumped back into a trade deficit for the first time in four months, as soaring energy import bills offset growth in the country’s shipments abroad, government data showed yesterday.
Japan logged a surprise deficit of ￥203 billion (US$1.8 billion), the first red ink in four months, according to data from the Japanese Ministry of Finance, despite market expectations for a surplus.
“Crude oil prices rebounded while the yen was weaker in the month,” Barclays Capital economist Yuichiro Nagai said.
The yen was 2.3 percent weaker against the dollar compared with levels recorded a year earlier, which helped push up imports costs.
The deficit came as a surprise after recent data showed Japan’s economy was picking up steam with exports growing on the back of a global economic recovery.
Nagai said there was no need to be overly pessimistic over figures for a single month.
Last month’s data showed “a correction in speed,” but the economy is likely to continue to expand in the July-September quarter even if it stalls in April-June, he said.
The latest report “confirms that the shipments will continue to drive Japan’s economy in coming months, feeding gradually to capital spending and household spending,” Norinchukin Research Institute chief Japan economist Takeshi Minami said.
Last month’s deficit is “mainly because of a rise in imports, reflecting Japan’s resilient economy,” Minami said.
Overall exports last month rose 14.9 percent from a year earlier to ￥5.85 trillion, thanks to an increase in shipments of cars and steel, chalking up growth for the sixth consecutive month.
The growth in exports is partly thanks to a rebound after powerful twin quakes in southwestern Japan last year disrupted production and supply chains.
However, imports expanded faster, rising 17.8 percent to ￥6.05 trillion, boosted by heavier costs for liquefied natural gas, coal and crude oil.
Japan’s dependence on fossil fuels has risen since the nation shifted to thermal power generation with most of the nation’s nuclear reactors remaining offline after the 2011 Fukushima Dai-ichi disaster.
Japan’s politically sensitive surplus with the US rose 19 percent to ￥411 billion as exports increased 11.6 percent.
The trade deficit with China shrank 22.4 percent to ￥311.8 billion as exports grew 23.9 percent.
Japanese Prime Minister Shinzo Abe has been trying for years to rejuvenate growth and end an extended period of on-and-off deflation.
Despite the uptrend in the overall economy, consumer prices remain below the Bank of Japan’s 2 percent inflation target.
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