Japan’s trade deficit ballons to fresh record

Japan’s trade deficit ballons to fresh record

TOKYO - Agence France-Presse
Japan’s trade deficit ballons to fresh record

Japan’s trade deficit ballooned to a fresh record for September as costs for imports of food and other necessities outstripped growth in exports. AP photo

Japan posted a record 15th consecutive monthly trade deficit in September, as data today showed the country’s energy bill soaring, but exports to China rebounded after a territorial row last year hurt demand for Japanese goods.

While the yen’s sharp decline is generally seen as a plus for Japan’s export picture, the overall volume of shipments turned down last month as an uncertain US economic recovery held back growth. Sky-high energy bills from imports of pricey fossil fuels - made more expensive by the weak currency - also weighed on the nation’s trade balance. Energy imports surged after the 2011 Fukushima crisis forced the shutdown of Japan’s nuclear reactors, which once supplied a third of the nation’s power. There is little public appetite to turn the reactors back on although Japan’s conservative government has said a restart was all but certain once safety is assured.

Hige dependence on energy imports

“Japan will continue to rely on energy imports, and any boost to exports from the weaker yen won’t be enough to turn around the trade deficit,” said RBS Securities chief economist Junko Nishioka.

The finance ministry said yesterday that Japan recorded a deficit of 932.1 billion yen ($9.5 billion), 64.1 percent higher than a 568.2 billion yen deficit a year earlier. It also marked the 15th straight month of deficit, the longest spell since comparable data started in 1979.

The value of exports rose 11.5 percent to 5.97 trillion yen, helped by shipments to China -- Japan’s largest trading partner -- which rose 11.4 percent from a year earlier. The improving figures come after a territorial dispute over a set of islands in the East China Sea set off protests in China and a consumer boycott of Japan-branded goods.

The unrest last year forced Japanese businesses to temporarily shutter operations in China, while the Asian neighbors’ trading relationship took a huge hit.

“Exports to China are on a gradual recovery path,” Masahiko Hashimoto, economist at Daiwa Institute of Research, told AFP. Shipments to the key US market were up 18.8 percent on year, but analysts said growth appeared to be stalling, after a two-week government shutdown in the U.S.