Japan’s trade deficit widened last month, as the nation’s import bill continued to rocket upward, fueled by a historic slide in the yen that has already helped push the economy back into reverse.
The trade gap grew to ￥2.16 trillion (US$15.5 billion) from ￥2.09 trillion, the Japanese Ministry of Finance reported yesterday.
The balance has now been negative for 15 straight months, the longest streak since 2015. Economists had expected a ￥1.62 trillion deficit.
Photo: EPA-EFE
Imports grew at the fastest pace since 1980 as the yen inflated already elevated commodity prices. The 53.5 percent gain was led by buying of crude oil, liquid natural gas and coal. Analysts had expected a 50 percent rise in inbound shipments.
Exports gained 25.3 percent driven by vehicles and semiconductor parts, for a slightly weaker increase than forecast by economists.
The prolonged trade deficit reflects Japan’s still fragile recovery from the COVID-19 pandemic, and came after the nation’s economy unexpectedly shrank in the third quarter, weighed down in part by the impact of the tumbling currency.
The streak of red trade ink is likely to keep feeding back into yen weakness, although the currency has made some gains this month.
The trade data showed that the average exchange rate was ￥145.09 to the US dollar, 30 percent weaker than a year earlier. The yen neared ￥152 per US dollar at one point last month, hitting a fresh 32-year low.
Following its first intervention to support the yen since 1998 in September, the Japanese government continued to step into markets again last month.
The trade outlook is further clouded by the prospect of a global slowdown as the impact of higher interest rates overseas weighs on demand.
For now, exports continue to rack up solid gains, with shipments to the US rising 36.5 percent from a year earlier to outstrip the total to mainland China.
Exports to China grew 7.7 percent for the smallest increase since June. Outbound shipments to Europe gained 28.1 percent.
Domestically, the weak yen has driven up energy costs and inflation rates, affecting Japanese households and companies. The nationwide core consumer price index hit 3 percent in September for the first time in more than three decades excluding the impact of tax hikes.
This month’s figure, which is to be announced today, is projected to be even higher at 3.5 percent.
To ease the hit of higher prices on consumption, Japanese Prime Minister Fumio Kishida last month ordered an economic stimulus package that includes aid to reduce energy costs and cash handouts for childcare.
His Cabinet has approved an extra budget of ￥29.1 trillion to partly fund the measures.
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