TOKYO- Japan logged a trade deficit for a 16th straight month in November as imports surged to a record level, while subdued growth in exports to China fanned concern about how COVID disruptions there could impact other economies.
The trade deficit came in at 2 trillion yen ($14.8 billion) – the fourth month in a row it has hit that level or more.
Imports soared 30.3 percent in value terms from a year earlier, more than the 27.0 percent increase expected by economists. They were led by imports of crude oil, coal and liquefied natural gas and inflated by the yen’s 28.5 percent depreciation against the dollar.
Exports grew 20 percent, in line with estimates and also hitting a record, led by US demand for cars and mining machinery.
But growth in exports to China, the world’s second-largest economy and Japan’s largest trading partner, was just 3.5 percent, hurt by weaker demand for chip-making machinery and auto parts. That compares with double-digit percentage growth in July through September and a gain of 7.7 percent in October.
“What caught my eye was continued weak exports to China,” said Takayuki Miyajima, senior economist at Sony Financial Group.
“Looking ahead, I’m concerned about how the China’s relaxation of its zero-COVID policy may affect the whole of the country’s supply chain.”
Japan has logged a cumulative trade deficit this year of 18.5 trillion yen, more than the record annual 12.8 trillion yen trade deficit for 2014.
Exports to the United States rose 32.5 percent, EU-bound exports climbed 32 percent while exports to Asia (excluding China) grew 11.6 percent.
Japan’s current account suffered the biggest year-on-year decline in the first half of this fiscal year since the 2008 global financial crisis, as the trade balance fell into deficit due to a weakening yen and rising global commodity prices.
In the April-September period, the current account surplus more than halved from a year earlier, falling 58.6 percent to 4.8458 trillion yen ($33.36 billion), data from the Ministry of Finance showed on Wednesday.
That was the biggest fall since the second half of fiscal 2008 and the second-largest since comparable data became available in 1985.
The current account surplus fell to a level last seen in 2014 when rising oil prices tipped Japan’s trade balance into the red, the data showed.
Meanwhile, Japan posted a record primary income surplus of 18.2332 trillion yen in the first half of this fiscal year as rising global commodity prices boosted profits at trading companies and a 22 percent fall in the yen to the dollar helped inflate the value of gains from overseas investments. — Reuters
