Imports dropped 1.7 percent in November from the year before to ¥7.08 trillion, declining for the first time in three months as crude oil prices plunged across the globe, government data showed Wednesday.
The balance in goods trade remained in the red for the 29th straight month, the longest period since officials began compiling comparable data in January 1979, but the deficit shrank 31.5 percent year on year to ¥891.9 billion, the Finance Ministry said in a preliminary report.
While imports fell, due largely to a 21.6 percent plunge in crude oil imports, exports rose for the third straight month, up 4.9 percent to ¥6.19 trillion, on the back of the yen’s recent sharp depreciation, the ministry said.
The nation’s trade deficit may contract further, given that lower oil prices will reduce import costs that swelled after the Fukushima nuclear crisis caused a huge increase in fossil fuel-based electricity, some analysts said.
“A downturn in crude oil prices is expected to help improve Japan’s trade balance, possibly boosting gross national income. We can see this as a positive,” said Koya Miyamae, senior economist at SMBC Nikko Securities Inc.
Average oil prices plummeted 19.5 percent to $90.7 per barrel in November, the lowest level since the $86.21 posted in December 2012, a ministry official said.
Other experts, however, said imports may not fall rapidly because the economy could bounce back on Prime Minister Shinzo Abe’s decision last month to put off the next consumption tax hike by 18 months to 2017.
“With domestic demand expanding, imports are expected to pick up,” which in turn could keep the trade balance in the red for the time being, said Mitsumaru Kumagai, chief economist at Daiwa Institute of Research.
The economy shriveled for a second straight quarter through September amid deteriorating private spending after the sales tax was jacked up by 3 percentage points to 8 percent on April 1.
In November, shipments to the United States, whose economy has been on a recovery track, increased 6.8 percent to ¥1.21 trillion, though imports declined 3.3 percent to ¥626.2 billion.
Exports to China, Japan’s biggest trade partner, inched up 0.9 percent to ¥1.15 trillion, while imports gained 3.9 percent to ¥1.75 trillion. Both totals were record highs for the month of November.
Shipments to the European Union meanwhile slid 1.3 percent to ¥591.7 billion for the first drop in 18 months, but imports rose 2.4 percent to ¥682.0 billion.
The figures were measured on a customs-cleared basis.
In November, the yen shed 13.2 percent of value against the dollar from the previous year to reach an average of 111.43. A falling yen supports exports by making Japanese products cheaper abroad and boosting the value of overseas revenues in yen terms. However, it also drives up import prices, dampening domestic consumption.
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