TOKYO – Japan recorded a trade deficit of 777.5 billion yen ($8.1 billion) in February despite the weaker yen as exports of cars and auto parts slipped while energy-related imports surged nearly 12 per cent.
It was the eighth consecutive monthly deficit following a record monthly deficit of 1.63 trillion yen in January.
Exports in February totalled 5.28 trillion yen ($55.1 billion) while imports surged to 6.06 trillion yen ($63.2 billion), the Finance Ministry reported Thursday.
Over recent months, the yen’s weakening by about 20 per cent against the U.S. dollar has helped export manufacturers but also boosted the cost of purchases of LNG and crude oil to make up for electricity shortfalls as all but two of Japan’s nuclear power plants are operating following the March 2011 Fukushima Dai-Ichi plant disaster.
Japan’s trade deficit rose to a record 6.93 trillion yen ($78.3 billion) in 2012 as fuel imports surged and a bitter territorial dispute with China provoked anti-Japanese riots, hammering exports to the world’s No. 2 economy.
The value of natural gas imports rose nearly 10 per cent in February from a year earlier, while imports of crude oil jumped 20 per cent, the ministry said.
Japan’s exports to China plunged 15.8 per cent to 842.3 billion yen ($8.8 billion) due partly to the weeklong Lunar New Year holiday. Imports from China jumped 22 per cent to 1.12 trillion yen ($11.7 billion).
Exports to crisis-stricken Europe fell 9.6 per cent to 535 billion yen ($5.6 billion) while imports jumped 11 per cent to 560 billion yen ($5.8 billion).
Shipments to the U.S. rose 5.7 per cent to 1 trillion yen ($10.4 billion) as imports edged up by 0.6 per cent, to 479.2 billion yen ($5 billion).
The U.S. dollar was trading at nearly 96 yen at midday Thursday compared with upper 70s levels last fall. The administration of Prime Minister Shinzo Abe favours a weaker currency to help make Japan’s exports more competitive in overseas markets, and market expectations of monetary easing have pulled the yen lower against the dollar and other major currencies.
Abe has pledged to boost Japan’s competitiveness and push ahead with difficult reforms needed to sustain growth in the longer run, while at the same time stimulating demand at home through higher public works spending.
Recent data suggest the economy may already have emerged from recession, but resource-scarce Japan’s need to import almost all the energy it uses, and many other commodities, have eaten into its perennial trade surpluses.