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Saturday 25 November 2017

Japan posts huge trade deficit for October

A visitor drives a three-wheeler Toyota i-ROAD electric concept car at a preview for the Tokyo Motor Show. AP
A visitor drives a three-wheeler Toyota i-ROAD electric concept car at a preview for the Tokyo Motor Show. AP

Keiko Ujikane

JAPAN posted its biggest October trade deficit on record, as a revival in exports to the US and China was overwhelmed by soaring costs for imported fuel in the wake of the nuclear industry's shutdown.

The shortfall of 1.09 trillion yen (€8.05bn) extended a record run of deficits to 16 months, and was larger than all 28 forecasts in a Bloomberg survey. Imports climbed 26.1pc from a year earlier, while exports gained 18.6pc.

The yen's slide has helped boost profit forecasts and pushed up stock prices of exporters such as Toyota, while at the same time raising the cost of imports.

"Exports are rebounding on a pick-up in the overseas economy, while imports are likely to expand further before a sales-tax increase" in April, said Norio Miyagawa, a senior economist at Mizuho Securities Research in Tokyo. "The deficits mean wealth is flowing out of Japan."

Fossil fuels contributed to nearly half of the gain in imports, with the value of petroleum shipments to Japan soaring by more than two-thirds from the previous year, and liquefied natural gas rising 39.4pc.

Exports to China increased 21.3pc from a year ago, when the two nations were embroiled in a row over islands in the East China Sea. Shipments to the US rose 26.4pc, while those to the European Union climbed 27pc.

The record stretch of 16 monthly deficits is the longest in comparable data back to 1979.

GDP grew at an annualised 1.9pc in the three months through September after a 3.8pc expansion the previous quarter.

The US, Japan's largest export destination, is displaying signs of picking up. The labour market in the US has shown "meaningful improvement" since the start of the Federal Reserve's bond-buying programme and the benchmark interest rate will probably stay low long after the purchases end, Fed chairman Ben Bernanke said on Tuesday in a speech in Washington. (Bloomberg)

Irish Independent

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