Japan trade deficit narrows in August on lower oil imports, stronger exports to US

TOKYO – Japan’s trade deficit narrowed in August from the year before as costs for crude oil imports plunged and exports to the U.S. showed steady growth.

The customs data released Thursday showed a 4.2 per cent drop from August a year earlier in the volume of exports for the world’s third-largest economy, likely mainly reflecting weakness in shipments to China.

But the value of exports rose 3.1 per cent from a year earlier, to 5.9 trillion yen ($48.7 billion) while imports fell 3.1 per cent to 6.5 trillion yen ($53.4 billion). The 569.7 billion yen ($4.7 billion) deficit was the largest in seven months.

The slowdown in China’s economy hit shipments of steel, auto parts and metalworking machinery hardest, pulling exports 4.6 per cent lower than a year earlier. Japan’s imports from China rose 15 per cent, causing its deficit to more than double, to 485.5 billion yen ($4 billion).

Exports to the U.S. rose 11 per cent from a year earlier, mainly due to sales of cars and pharmaceuticals.

Slowing exports have become a drag on growth, contributing to a contraction in the April-June quarter despite the boost to the overall trade balance from lower prices for imported oil and gas. Costs for crude oil imports fell about 33 per cent in August from a year earlier.