World’s third-largest economy runs biggest trade deficit in a single month in eight years.
Japan’s exports in January grew less than expected as manufacturers faced pressure from slowing overseas demand for cars and struggled with global supply constraints.
The world’s third-largest economy ran its biggest trade deficit in a single month in eight years, as persistent rises in fuel and raw material costs swelled imports, the value of which outstripped shipments.
The growing trade deficit highlights the export-reliant economy’s exposure to soaring commodity and raw material costs, on which manufacturers rely for producing goods at home.
Exports rose 9.6 percent year-on-year in January, Ministry of Finance data showed on Thursday, which is below a median market forecast for a 16.5 percent increase in a Reuters poll. It followed a 17.5 percent growth in the prior month.
By region, exports to China, Japan’s largest trading partner, shrank 5.4 percent in the 12 months to January, posting its first contraction in 19 months on weaker general machinery shipments to the country.
US-bound shipments, another key market for Japanese goods, grew 11.5 percent in January, as stronger machinery shipments outweighed a fall in car exports.
Imports surged 39.6 percent in the year to January, versus the median estimate for a 37.1 percent increase, bringing the trade balance to a deficit of 2.1911 trillion yen ($18.99bn), compared with the median estimate for a 1.607 trillion yen ($13.89bn) shortfall.
Separate government data showed core machinery orders, which serve as a leading indicator of capital spending in the coming six to nine months, were up 3.6 percent in December from the prior month, better than an expected 1.8 percent fall.
Manufacturers expected core orders to decline 1.1 percent in January-March, after a 6.5 percent gain in the previous quarter.
Japan’s economy grew slightly less than expected in the final quarter of 2021 as falling coronavirus cases helped prop up consumption, government data showed on Tuesday, though a record surge in Omicron variant cases and the high raw material prices are clouding the outlook.
SOURCE: REUTERS
