Japan starts the year with record trade deficit

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Japan starts the year with record trade deficit

A rebound in Japan’s exports in January failed to keep pace with growth in imports, leaving a record 1.63 trillion yen ($17.4 billion) trade deficit.

Provisional data released yesterday show exports for the world’s third-biggest economy rose 6.4 percent to 4.8 trillion yen in January from a year earlier, while imports jumped 7.3 percent to 6.43 trillion yen.

A weakening in Japan’s currency over the past few months has helped boost exports by making its products more price competitive overseas. But it has also inflated the value of resource-scarce Japan’s imports of crude oil and other commodities, which offset a recovery in demand for Japanese-made vehicles and machinery.

Trade with the United States and major Asian partners rose as the global recovery strengthened and the economic impact of friction with China over a territorial dispute appeared to recede. But trade with European countries remained weak, with a 6 percent decline in exports from a year earlier. At the same time, Imports from Western Europe climbed 6.3 percent.

Exports to the United States jumped 11 percent from the year before to 839.8 billion yen, while imports rose 5.8 percent to 521.1 billion yen. That boosted Japan’s surplus with the U.S. by 20 percent from a year earlier to 318.7 billion yen.

Exports to China climbed 3 percent, but imports also surged, leaving a deficit of 654.6 billion yen, up 11 percent from the year before. Shipments of Japanese products to other Asian nations rose sharply, however, as manufacturers stepped up efforts to boost production and sales outside of China. Exports to Taiwan jumped 28.8 percent from a year earlier, to Thailand by 23.7 percent, to Vietnam by 21 percent and to Hong Kong by nearly 12 percent.

Japan’s imports of crude oil and other fuel rose 8.8 percent to 2.26 trillion yen, accounting for over a third of its total import bill.

Exports of transport equipment climbed 25 percent, mainly due to rising exports of auto parts, while exports of machinery increased 18 percent.

Japan’s trade deficit rose to a record 6.93 trillion yen in 2012 as fuel imports surged and a bitter territorial dispute with China provoked anti-Japanese riots, hammering its exports.

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