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1st LD Writethru: Japan's trade account returns to deficit in April on falling oil prices, brisk car exports

Xinhua, May 25, 2015 Adjust font size:

Japanese exports rose at a faster pace than expected in April, reducing the country's trade deficit by 93.5 percent from a year earlier to 53.4 billion yen (439 million U.S. dollars), with falling prices for crude oil reducing import costs also contributing to the decline, the Ministry of Finance said on Monday.

The latest data marks the first time Japan has returned to a deficit in nearly three years, with the value of shipments overseas rising 8 percent from a year earlier as imports retreated 4.2 percent in the recording period, marking the fourth straight month of decline.

The finance ministry noted that shipments to the United States jumped 21 percent, while those to China climbed 2.4 percent compared to the same time a year earlier, marking a second successive month of increase.

Overall export volume gained 1.8 percent, while slumping prices for crude oil and related energy imports saw the overall import volume increase 0.1 percent on year in April, according to the latest government statistics.

The value of crude oil imports plummeted 34.6 percent from a year earlier in the recording period, following a 51 percent drop logged a month earlier, the finance ministry also highlighted.

Conversely, the export of motor vehicles helped turn red ink to black in April, with exports rising 7.2 percent, with the value of shipments of vehicles to the U.S. and the European Union rising notably, the finance ministry said.

Large exporters are starting to find more traction as the economy shows embryonic signs of strengthening following a protracted period of recession. Improving economic conditions have helped increase investment and spending, as well as workers' incomes, as consumption here improves in twine with increasing demand from foreign markets.

The consensus among leading economists is that while import growth will continue to show signs of weakness as the effects of falling oil prices impacts a wider basket of products, continued improvements in the heath of the U.S. economy will help underpin Japan's exports henceforth.

"Japan's economy will be more robust this year, led by domestic consumption and external demand. We think that the U.S. economy will continue to recover moderately, helping to boost Japan's exports," Yoshitaka Suda, an economist at Nomura Holdings Inc., said. Endi