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Japan logs 1st trade deficit in 5 months on rising commodity prices, drop in auto exports

Xinhua, February 20, 2017 Adjust font size:

Japan posted a larger-than-expected goods trade deficit in January as costs for energy imports increased and exports of auto-related products dropped, the government said in a report on Monday.

According to the finance ministry's preliminary report, the deficit, the first red-ink logged in five months, totaled 1.09 trillion yen (9.63 billion U.S. dollars), with imports rising more than exports, owing to increasing commodity prices during the reporting period.

The latest data showed that exports gained 1.3 percent to 5.42 trillion yen, bolstered by robust shipments to Asian markets, the ministry said, while imports gained for the first time in 25 months.

The ministry said in its preliminary report that imports had leapt 8.5 percent from a year earlier to 6.51 trillion yen, with the value of crude oil imports jumping 35.6 percent from a year earlier, to 637.6 billion yen in January.

Japan is still highly reliant on energy imports as the majority of its nuclear power plants remain shuttered in the wake of the Fukushima nuclear disaster in 2011, which remains the worst nuclear disaster since Chernobyl in 1986 and the worst commercial disaster in history.

Regarding further specifics of the trade data, Japan's surplus with the U.S. saw the value shrink for a second straight month, standing at 399.31 billion yen, as exports to the United States fell after auto shipments dropped 10.1 percent year-on-year, the ministry's data showed.

Exports from Japan to the U.S., meanwhile, declined 6.6 percent to 1.05 trillion yen and imports rose 11.9 percent to 654.66 billion yen, the ministry's data also showed.

Shipments to China, meanwhile, increased 3.1 percent to 887.11 billion yen on rising demand for auto parts, the ministry said.

Imports of clothing added to the overall import picture from China and contributed to a 7.2 percent gain to 1.80 trillion yen, marking the first rise in 10 months, the ministry said.

Exports to the European Union retreated in the recording period, however, falling 5.6 percent to 596.51 billion yen, and marking the fourth straight month of decline the ministry's data showed.

Meanwhile, imports were down 4.0 percent to 691.32 billion yen, marking an 11th consecutive month of decline the government's figures, all of which were measured on a customs-cleared basis, showed.

Some economists were of the view that the pressure on exports would be short-lived as there are no fundamental indicators suggesting a problem with demand for Japanese goods.

"The slowdown in exports seen in January is just temporary and there's no change to the view that Japan's economy is driven by external demand, while domestic forces remain weak," said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co.

The January data included for the first time imported shale gas from the U.S. Endit