Weak currency bloats Japanese trade deficitJapan’s trade deficit widened to a larger-than-expected 879.9 billion yen ($8.6 billion) in April as its weakening currency accentuated surging import costs.
Exports rose 3.8 percent from the same month a year earlier to 5.78 trillion yen, while imports jumped 9.4 percent to 6.66 trillion yen, according to preliminary figures reported by the Japanese Finance Ministry yesterday.
Japan’s trade deficit stood at 362.4 billion yen in March, just over half the size of February’s gap.
The yen has slid in value by over 20 percent against the U.S. dollar and euro, in turn pushing up the relative value of other currencies.
Its decline, due to expectations among market speculators and also monetary policies that are injecting huge sums of cash into the economy, is expected to lead to a recovery in exports. Stronger growth in the United States and some other major markets has also helped boost demand for Japanese products.
But a weaker currency also raises costs for imports of crude oil, gas and other commodities for this resource-scarce nation.
In April, the cost of oil imports slipped as crude oil prices moderated, but the value of imports of liquefied natural gas jumped 18 percent from a year earlier. Japan’s demand for natural gas has ballooned since most of its nuclear power plants remain closed following the March 2011 accident at the Fukushima Dai-ichi plant, and the deterioration in the trade balance is adding to pressure from the pro-nuclear government to restart plants.
Japan’s trade deficit ballooned to a record $83.4 billion in the fiscal year that ended in March, as imports climbed and a surge in exports to the United States failed to offset the impact from territorial tensions with China and weak demand from crisis-stricken Europe.
The United States remained Japan’s biggest export market in April, as shipments rose 15 percent to 1.1 trillion yen, while imports edged up less than 1 percent to 534 billion yen, leaving a surplus in of 563 billion yen. AP