Japan logged a record trade deficit of ¥684.7 billion in November as exports continued to suffer from the flooding in Thailand and fears of a global economic downturn lingering from the sovereign debt crisis in Europe, the Finance Ministry said Wednesday in a preliminary report.
A deficit in goods trade was logged for the second straight month. Exports dropped 4.5 percent from a year earlier to ¥5.19 trillion for the second consecutive monthly slide, while imports grew 11.4 percent to ¥5.88 trillion, the 23rd consecutive month of gain, on growing domestic energy consumption, the report said.
Trade with the European Union was hit by concerns about fallout from fiscal problems in the 27-nation bloc. Japan’s trade surplus with the region shrank 84.2 percent to ¥27.6 billion, the lowest figure seen since 1979. Exports of vehicles and digital cameras suffered the most.
“The deterioration in the financial environment has possibly caused a negative impact on demand from Europe,” Lee Chiwoong, an economist at Goldman Sachs Japan Co., said in a report.
The figures were measured on a customs-cleared basis.
Japanese exports also were affected by the yen’s persistent strength against the dollar and other currencies, which has increasingly forced manufacturers to shift production abroad to seek cheaper labor and other costs.
The flooding in Thailand has affected major Japanese manufacturers in the country by crimping parts deliveries and has also curbed shipments from Japan considerably. In November, Japan’s exports to Thailand sank 24.0 percent to ¥186.7 billion.
Overall exports were also impacted by slower shipments of such products as steel, semiconductors and other electronic parts to Asian economies, including China, South Korea, Taiwan and Singapore.
“We are closely watching the development in overseas economies, especially in Asia,” a Finance Ministry official said, warning that weaker industrial output by emerging economies in Asia could further weigh on the Japanese trade balance.
Japan’s imports continued in November to grow steadily on demand of such products as liquefied natural gas and crude oil.
The ministry said the trend of increasing energy consumption in Japan will remain for the foreseeable future as utilities boost thermal power generation to offset reactor shutdowns.
By country, Japan’s exports to China slowed 7.9 percent to ¥1.01 trillion while imports from its biggest trading partner were up 6.6 percent to ¥1.33 trillion.
With the United States, exports gained 2.0 percent to ¥886.8 billion and imports edged down 0.8 percent to ¥507.8 billion. Exports to the European Union fell 4.6 percent to ¥626.5 billion while imports surged 24.4 percent to ¥598.9 billion.
Exports to Asia as a whole, including China, sank 8.0 percent to ¥2.80 trillion while imports climbed 7.8 percent to ¥2.63 trillion.