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Japan logs record trade deficit for month of February

Kyodo

Japan registered a goods trade deficit of ¥800.3 billion in February, a record for the month and up 3.5 percent from a year before, the government said Wednesday, amid growing imports of fossil fuels after the Fukushima nuclear crisis.

The trade balance posted the 20th straight month of red ink, the longest period since comparable data became available in January 1979, the Finance Ministry said in a preliminary report.

The value of imports rose 9.0 percent to ¥6.6003 trillion, up for the 16th consecutive month, with those of liquefied natural gas soaring 11.4 percent and liquefied petroleum gas 14.8 percent, the ministry said.

Imports of automobiles, especially those from the European Union, also skyrocketed 81.1 percent due in part to a rush in demand prior to the 3-percentage-point consumption tax hike to 8 percent in April.

Exports increased for the 12th month in a row, up 9.8 percent to ¥5.8000 trillion, as the yen dropped versus the U.S. dollar by 12.4 percent on year to ¥102.83 in the reporting month, but still failed to exceed imports.

A falling yen usually supports exports by making Japanese products cheaper abroad and boosts the value of overseas revenues in yen terms, though it drives up import prices. Japan depends on imports for more than 90 percent of its energy needs.

Japan’s trade balance is likely to remain in the red, as demand for natural resources has been robust from utilities bolstering fossil fuel-based power generation as an alternative to stalled nuclear power in the wake of the accident at the Fukushima power plant in March 2011, analysts said.

Exports to China, Japan’s biggest trade partner, jumped 27.7 percent to ¥1.0749 trillion, while imports from China were up 5.7 percent to ¥1.1856 trillion. Japan’s trade deficit with China was ¥110.8 billion, marking the 24th straight month of red ink.

Exports to the United States climbed 5.6 percent to ¥1.0636 trillion, and imports surged 20.8 percent to ¥579.9 billion.

The pace of growth in exports to the world’s largest economy slowed in February, compared with a 21.8 percent rise in January, as heavy snow and bitter cold in many areas dampened retail sales, a Finance Ministry official said.

Shipments to the European Union grew 13.9 percent to ¥609.5 billion, and imports increased 15.4 percent to ¥646.9 billion.

It remains to be seen to what extent the escalating turmoil in Ukraine sparked by Russia’s intervention in Crimea will affect Japan’s trade with Europe down the road, the official said.

The figures were measured on a customs-cleared basis.