Japan suffers record trade deficit
Published 20/02/2013 | 04:11
A rebound in Japan's exports in January failed to keep pace with growth in imports, leaving a record 1.63 trillion yen (£11.2 billion) trade deficit for the month.
The provisional data shows exports for the world's third-biggest economy rose 6.4% to 4.8 trillion yen (£33 billion) in January from a year earlier, the first year-on-year increase in eight months, while imports jumped 7.3% to 6.43 trillion yen (£44.5 billion).
A weakening in Japan's currency over the past few months has helped boost export shipments by making its products more price competitive overseas.
But it has also inflated the value of resource-scarce Japan's imports of crude oil and other commodities, which offset a recovery in demand for Japanese-made vehicles and machinery.
This trend is hindering Japan's long-time strategy of relying heavily on exports to drive growth and adding to pressure to find fresh momentum through stronger domestic demand at a time when the workforce is ageing and shrinking and corporate investment remains feeble.
Prime Minister Shinzo Abe took office in December, vowing to boost the economy by restoring Japan's export competitiveness, while at the same time stimulating demand at home through higher public works spending. He also has promised to push ahead with politically tough reforms needed to sustain growth in the longer term, though such efforts have not made much headway in the past.
Trade with the US and major Asian trading partners rose as the global recovery strengthened and the economic impact of friction with China over a territorial dispute appeared to recede. But trade with European countries remained weak, with a 6% decline in exports from a year earlier. Imports from Western Europe climbed 6.3%.
Exports to the US jumped 11% from the year before, while imports imports rose 5.8%.
Exports to China climbed 3% but imports also surged, leaving a deficit of 654.6 billion yen (£4.5 billion), up 11 % from the year before.
Japan's trade deficit rose to a record 6.93 trillion yen (£50.7 billion) in 2012 as fuel imports surged and a bitter territorial dispute with China provoked anti-Japanese riots, hammering its exports.