Trade deficit soars on fuel import costs

November's 35% surge sets record increase for 17th month

AP, Bloomberg

The trade deficit ballooned 35 percent last month compared with a year ago, the biggest November deficit on record, as fuel imports soared following the 2011 nuclear catastrophe, the government said Wednesday.

The run of 17 straight months of deficits is the longest since comparative records were first tallied in 1979, the Finance Ministry said.

The trade deficit for November totaled ¥1.29 trillion, compared with a deficit of ¥957 billion the same month in 2012. Imports grew 21 percent last month, even as exports improved 18 percent on year.

The sinking value of the yen is another factor. A weak yen is a boon for exporters but adds to the fuel bill.

With all of the nation’s reactors shut down due to the Fukushima nuclear disaster, Japan is relying on imports of oil and natural gas.

The forthcoming increase in the consumption tax may also be pushing up imports, the ministry said.

Exports to China increased 33.1 percent from a year earlier when the two nations were embroiled in the Senkaku Islands territorial dispute. Shipments to the U.S. rose 21.2 percent, while those to the European Union climbed 19.4 percent.

Imports of petroleum climbed 34.9 percent and liquefied natural gas 37.4 percent from a year earlier, while shipments to Japan of electrical machinery gained 22.6 percent.

“Imports are surging due to the purchase of smartphone and tablet devices as well as last-minute demand ahead of April’s sales tax increase,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

  • Jens Hvass

    The fossil fuel import may have been more or less the same for Nov. 2012 and Nov. 2013 (at least consumption will be more or less the same). On the other hand, inflation and lower exchange rates for the yen has been actively pursued by the present government. Thus this headline is somewhat misleading and “Trade deficit soars on Abenomics” closer to the truth.