Japan logged a goods trade deficit of ¥1.2 trillion ($11 billion) in 2018, government data showed Wednesday, the first red ink in three years as the cost of energy imports surged.
Imports rose 9.7 percent from a year earlier to ¥82.69 trillion, outpacing a 4.1 percent increase in exports to ¥81.49 trillion.
For December alone, exports marked their steepest fall since October 2016, down 3.8 percent to ¥7.02 trillion, and shipments to China, Japan’s largest trading partner, sank 7 percent from a year earlier amid slumping demand for devices from Chinese makers of mobile phones, semiconductors and liquid crystal displays.
Exports have been a major component of the economy’s current expansion cycle, which is likely to be the longest since the end of World War II.
But demand has waned in recent months amid a trade war between the United States and China. Nidec Corp., a maker of electric motors, last week warned investors that it expects a fall in profit for the year ending in March due to a fall in orders from China as a result of the trade tensions.
Kazuma Maeda, an analyst at Barclays Securities Japan, warned that looking forward “the fading boost to China-bound exports of capital goods driven by ‘Made in China 2025’ could prove a drag on exports.”
Made in China 2025, President Xi Jinping’s blueprint for growing the country’s technology industry, has been a source of U.S. President Donald Trump’s ire and could be revised in bilateral trade talks.
A string of natural disasters in the summer, including a powerful typhoon that temporarily shut down Osaka’s main airport, may have also played a part in slowing imports.
Meanwhile, imports of energy-related commodities such as liquefied natural gas and kerosene were pushed up by an increase in global oil prices, with crude oil imports surging 24.5 percent to ¥8.91 trillion last year.
By region, Japan ran a deficit of ¥3.28 trillion with China. The margin of red ink shrank for the third consecutive year, however, as exports grew to a record high on demand for equipment used to manufacture semiconductors.
Against all of Asia, Japan saw a surplus of ¥5.54 trillion.
Japan had a surplus of ¥6.45 trillion against the United States, a smaller amount than the previous year amid falling automobile exports and a rise in aircraft imports.
With Europe, Japan logged a deficit of ¥487.5 billion, with imports of medicine from Ireland contributing.
For December, Japan logged a goods trade deficit of ¥55.3 billion, according to a preliminary report by the Finance Ministry. Imports grew 1.9 percent to ¥7.08 trillion.
The figures were compiled on the basis of those goods that have cleared customs.
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