Japan posted a record deficit of ¥5.427 trillion in goods trade in the first half of fiscal 2014, against a backdrop of rising energy imports caused by the prolonged halt in nuclear power generation, the government said Wednesday.
The deficit expanded 8.6 percent from a year earlier to reach the highest amount for the April-September period since data became available in 1979.
The value of imports increased 2.5 percent to ¥41.324 trillion, the Finance Ministry said in a preliminary report.
Imports of liquefied natural gas gained 8.7 percent while petroleum products rose 7.6 percent, the ministry said.
Exports rose 1.7 percent to ¥35.897 trillion, with those of metal processing products surging 26.8 percent and automobiles climbing 2.6 percent.
The results highlighted the continuing net outflow of money from the country as utilities bolster fossil-fuel based power generation as an alternative to nuclear power, now stalled in the wake of the 2011 triple-meltdown disaster at the Fukushima No. 1 nuclear plant.
The depreciation of the yen also compounded the size of the deficit. During the six months through September, the value of the yen slid by 4.1 percent year-on-year against the dollar to 102.55, the ministry said.
A falling yen usually supports exports by making Japanese products cheaper abroad, while boosting the value of overseas revenues in yen terms. However, it also pushes up import prices, which the country depends on to meet around 90 percent of its energy needs and 60 percent of its food supplies.
Some analysts expect the trade deficit to shrink given recent falls in crude oil prices as fears of a global economic slowdown mount.
“This may push down import prices, which could significantly contribute to an improvement of the trade balance,” said Taro Saito, senior economist at the NLI Research Institute.
In fact, the value of crude oil imports decreased 3.5 percent from the previous year to ¥6.567 trillion in the April-September period, the ministry said.
But Takeshi Minami, chief economist at the Norinchukin Research Institute, disagreed with this view, saying a potential slump in the world economy would drag down exports, preventing the nation’s trade deficit from contracting.
In the first half of fiscal 2014, exports to the United States fell 0.1 percent to ¥6.550 trillion, while imports gained 6.2 percent to ¥3.718 trillion.
Exports to China — Japan’s biggest trade partner — increased by 3.7 percent to ¥6.644 trillion, and imports rose 2.8 percent to ¥9.079 trillion.
In September alone, the country posted a trade deficit of ¥958.3 billion, marking the 27th straight month of red ink. The deficit increased 1.6 percent from a year earlier due partly to robust imports of Apple Inc.’s newest iPhone models, the ministry said.
The figures were measured on a customs-cleared basis.