September 20, 2022
In August, Japan saw its largest monthly trade deficit ever as imports increased due to high energy prices and a depreciating yen, revealing the economy’s susceptibility to outside price pressures.
The expanding trade imbalance shows how shaky Japan’s economic recovery is, which has so far mainly held together despite the high import costs businesses are paying, which are made worse by the yen’s decline to a 24-year low and the mounting likelihood of a worldwide slowdown.
The cost of crude oil, coal, and liquefied natural gas (LNG) drove up imports by 49.9% in the year to August, resulting in the largest trade deficit in history of 2.8173 trillion yen ($19.71 billion).
According to Ministry of Finance data, the growth in imports outpaced a 22.1% year-over-year increase in exports in the same month and beyond the median market prediction of a 46.7% jump in a Reuters poll.
The trade deficit in August was greater than the 2.3982 trillion yen shortfall predicted in a Reuters poll and represented the 13th consecutive month of year-over-year deficits.
The United Arab Emirates’ oil imports as well as Australia’s coal and LNG imports significantly increased global imports.
Exports to China, Japan’s largest trading partner, increased 13.5% in value year over year due to increased shipments of motor vehicles such hybrid cars to the nation.
In August, shipments to the country with the largest economy in the world saw a 33.8% increase, mostly as a result of greater exports of automobiles and auto parts.
However, the report showed a 1.2% volume fall in exports.
Source: Reuters
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