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Japan breaks record with 15-month string of trade deficits

AP

Japan posted a record 15th consecutive monthly trade deficit in September, as data Monday showed the country’s energy bill soaring, but exports to China rebounded after a territorial row last year hurt demand for Japanese goods.

While the yen’s sharp decline is generally seen as a plus for Japan’s export picture, the overall volume of shipments turned down last month as an uncertain U.S. economic recovery held back growth.

Sky-high energy bills from imports of pricey fossil fuels — made more expensive by the weak currency — also weighed on the nation’s trade balance..

“Japan will continue to rely on energy imports, and any boost to exports from the weaker yen won’t be enough to turn around the trade deficit,” said RBS Securities chief economist Junko Nishioka.

The Finance Ministry said the nation recorded a deficit of ¥932.1 billion, 64.1 percent higher than the ¥568.2 billion deficit a year earlier. It also marked the 15th straight month of deficit, the longest spell since comparable data started in 1979.

The value of exports rose 11.5 percent to ¥5.97 trillion, helped by shipments to China — Japan’s top trading partner — which rose 11.4 percent from a year earlier.

The improving figures come after a territorial dispute over islets in the East China Sea set off protests in China and a consumer boycott of Japan-branded goods last year. The unrest forced Japanese firms to temporarily close operations in China.

“Exports to China are on a gradual recovery path,” said Masahiko Hashimoto, economist at Daiwa Institute of Research.

Shipments to the key U.S. market were up 18.8 percent on year, but analysts said growth appeared to be stalling, after a two-week government shutdown threatened to send the U.S. into a debt default.