Japan registered a ¥4.84 trillion ($48.7 billion) trade deficit for the six months through June, the biggest on record for any six-month period, as the yen’s sharp slide boosted import costs despite a rebound in exports, the government said Wednesday.
During the first half of 2013, the value of imports rose 9.2 percent on year to ¥38.8 trillion, with those of liquefied natural gas jumping 13.2 percent and of crude oil increasing 6.0 percent, the Finance Ministry said in a preliminary report.
Exports, a key engine of Japan’s economic growth, grew 4.2 percent to ¥33.96 trillion on the back of the yen’s weakness and a recovery in the U.S. economy, but still failed to outweigh imports, the report showed.
The yen sank against the dollar by 18.9 percent from a year earlier in the January-June period, the ministry said.
The nation’s trade balance is unlikely to turn positive soon, as demand for gas and oil will stay robust from utilities boosting fossil fuel-based power generation as an alternative to nuclear power amid the continued shutdown of most of the nation’s reactors, analysts said.
“Imports of energy such as LNG are expected to hover at high levels, which may prevent the trade balance from swinging into the black for the time being,” said Mitsumaru Kumagai, chief economist at Daiwa Institute of Research.
Japan’s trade deficit, meanwhile, has shown signs of shrinking, with exports bouncing back, other economists said.
A falling yen usually supports exports by making Japanese products cheaper abroad and increases the value of overseas revenues in yen terms, but it pushes up import prices. Japan depends on imports for more than 90 percent of its energy needs.
The Finance Ministry also said the country logged a June trade deficit of ¥180.8 billion, with imports climbing 11.8 percent.
Japan’s import costs surged since the Fukushima nuclear crisis started in 2011 amid the shutdown of its atomic reactors and purchases of pricey fossil-fuel alternatives, denting an already lumbering economy.
Exports meanwhile climbed 7.4 percent to ¥6.06 trillion, growing for the fourth straight month as the value of exports to Europe and car shipments to the U.S. picked up, although overall shipment volumes remained weak.
The government of Prime Minister Shinzo Abe has become vigilant against the impact of higher fuel prices on the world’s third-largest economy, which has been recovering on export-led production growth and a pickup in consumption.
“Payments for imports have been rising in the short term as the yen’s exchange rate is on a weak note,” Chief Cabinet Secretary Yoshihide Suga said at a regular press conference. “Fuel prices have been going up considerably. We have to monitor their developments.”
In the January-June period, ship ments to China, Japan’s biggest trade partner, declined 0.6 percent to ¥5.838 trillion, amid the lingering effects of a bilateral territorial row over a group of uninhabited islands in the East China Sea.
But Japan’s imports from China went up 11.4 percent to ¥8.111 trillion, the largest since comparable data became available in 1979.
Exports to the 27-member European Union dropped 3.3 percent to ¥3.285 trillion, as the region’s economy remained sluggish, although imports from the region gained 12.1 percent to ¥3.618 trillion.
Japan’s shipments to the United States surged 11.5 percent to ¥6.221 trillion, while imports climbed 6.0 percent to ¥3.278 trillion, according to the ministry.
The figures were measured on a customs-cleared basis.