TOKYO – Japan’s trade deficit widened to a larger-than-expected 879.9 billion yen ($8.6 billion) in April as its weakening currency accentuated surging import costs.
Exports rose 3.8 per cent from the same month a year earlier to 5.78 trillion yen ($56.3 billion), while imports jumped 9.4 per cent to 6.66 trillion yen ($64.9 billion), according to preliminary figures reported by the Finance Ministry on Wednesday. Japan’s trade deficit stood at 362.4 billion yen in March, just over half the size of February’s gap.
The yen has slid in value by over 20 per cent against the U.S. dollar and euro, in turn pushing up other currencies in relative value. Its decline, due to expectations among market speculators and also monetary policies that are injecting huge sums of cash into the economy, is expected to lead to a recovery in exports. Stronger growth in the U.S. and some other major markets has also helped boost demand for Japanese products.
But a weaker currency also raises costs for imports of crude oil, gas and other commodities for this resource-scarce nation. In April, the cost of oil imports slipped as crude oil prices moderated, but the value of imports of liquefied natural gas jumped 18 per cent from a year earlier. Japan’s demand for natural gas has ballooned since most of its nuclear power plants remain closed following the March 2011 accident at the Fukushima Dai-ichi plant, and the deterioration in the trade balance is adding to pressure from the pro-nuclear government to restart more plants.
Japan’s trade deficit ballooned to a record $83.4 billion in the fiscal year that ended in March, as imports climbed and a surge in exports to the U.S. failed to offset the impact from territorial tensions with China and weak demand from crisis-stricken Europe.
The U.S. remained Japan’s biggest export market in April, as shipments rose 15 per cent to 1.1 trillion yen ($10.7 billion), while imports edged up less than 1 per cent to 534 billion yen ($5.2 billion), leaving a surplus in of 563 billion yen ($5.5 billion).
The deficit with China rose 60 per cent to 442 billion yen ($4.3 billion) as exports edged slightly higher from a year earlier to 998.4 billion yen ($9.7 billion), while imports surged 13.3 per cent to 1.44 trillion yen ($14 billion). Exports to the European Union fell 3.5 per cent.