Thursday , May 19 2022

Japan exports in October, but not enough to erase the deficit


TOKYO – The Japanese trade deficit rose to the highest level since July 2015 in October, as export earnings exceeded nearly 20% of the import jump.

The ministry of finance said on Monday that exports had grown from 8.2 percent annually. In September, exports fell 1.2 percent from the previous year, in the first decline for the world's third largest economy since 2016, mainly due to natural disasters.

Japan recorded a trade deficit of 449 billion yen ($ 4 billion), preliminary data show.

The politically sensitive trade surplus with the United States fell 11 percent to 573.4 billion yen ($ 5.1 billion), while Japan's imports from the United States rose by 34 percent, including imports of food, oil, steel and other metals and machinery. Exports to the United States rose almost 12 percent, mainly in cars, machinery, medical products and tires to 1.43 billion yen ($ 12 billion).

This can help ease trade tensions after President Donald Trump imposed penalties on Chinese exports worth billions of dollars.

China was the largest export market in Japan, with 1.48 trillion yen ($ 13 billion) shipped, up 9 percent from the same month last year, while imports from China increased 16 percent to 1.9 trillion yen ($ 16 billion).

Although trade with China and the United States remained robust despite war tariffs between the two countries, total trade has recently been a slowdown in growth, and prospects for exports are not promising, economists say.

Cabinet office cabinet data released last week showed that the Japanese economy fell to an annual rate of 1.2 percent in July-September, as consumption, investment and exports have declined.

Natural disasters also took the toll. This implies the closure of the main airport in the western part of Kansai after the tifon and a major earthquake hit the northernmost island of Hokkaido, leading to deadly landslides and widespread dissemination.

Prime Minister Shinzo Abe's program to stimulate the fight against deflation of cheap loans has helped the economy grow for most of last decade despite stagnation in domestic markets as the population is getting older and decreasing.

Junichi Makino, chief economist at SMBC Nikko, expressed optimism, stressing that car exports to the United States remain strong, and tariffs imposed by the United States on Japanese exports of steel and aluminum are a small part of the overall pan-Pacific trade.

The trade deficit can also be settled as oil prices stabilize: resources are scarce Japanese and remain largely dependent on imports of oil, gas and coal.

But further slowing down of the Chinese economy or global weakening of investments could cause widespread damage, he said.

"We need to be careful," he said.

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