Business / Economy

Japan logs January trade deficit of ¥943.4 billion, dipping into the red for the first time in eight months

Kyodo

Japan’s trade balance swung to a deficit of ¥943.4 billion ($8.9 billion) in January, falling into the red for the first time in eight months after imports rose due largely to the higher cost of natural resources, government data showed Monday.

The deficit was still 13.6 percent smaller than the ¥1.09 trillion deficit recorded a year ago, as exports grew 12.2 percent to ¥6.09 trillion helped by strong demand for hybrid cars and semiconductor production machinery from China.

Imports climbed 7.9 percent to ¥7.03 trillion, reflecting a surge in the value of crude oil imports, the Finance Ministry said in a preliminary report. Crude oil imports registered an 11.4 percent increase to ¥711.3 billion, up for the 14th straight month.

Japan tends to report a trade deficit in the month of January as shipments of goods are liable to slow, due partly to the country’s New Year’s holidays, according to a ministry official.

The yen was firmer against the U.S. dollar, weighing on the value of exports. The dollar averaged ¥112.47 in January, down from ¥116.48 a year ago.

“Exports to China led the overall growth thanks to demand for semiconductor-related equipment and for general machinery as the country is stepping up infrastructure investment,” said Toru Suehiro, senior market economist at Mizuho Securities Co.

“In that sense, a lot depends on how China’s economy will perform going forward,” Suehiro said. “We will likely see the impact of the yen’s recent rise on trade as well.”

Recently the dollar has been trading at its lowest level in 15 months.

With China, Japan ran a trade deficit of ¥578.63 billion with a 30.8 percent surge in exports to ¥1.16 trillion — a record-high for January — and a 3.3 percent decline in imports to ¥1.74 trillion.

Japan posted a trade deficit of ¥109.68 billion with the rest of Asia after imports gained 3.0 percent to ¥3.46 trillion and exports increased 16.0 percent to ¥3.35 trillion, the largest on record for the month.

Japan’s trade surplus with the United States dropped 12.3 percent from a year ago to ¥349.57 billion. Exports were up 1.2 percent to ¥1.07 trillion and imports rose 9.4 percent to ¥716.97 billion.

The ministry data showed a trade deficit of ¥100.79 billion with the European Union.

The figures were measured on a customs-cleared basis.