• Kyodo

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Japan’s goods trade balance logged its first deficit in four months in May on sluggish exports to China amid Beijing’s economic friction with the United States, government data showed Wednesday.

The deficit stood at ¥967.1 billion ($8.9 billion) with exports dropping 7.8 percent from a year earlier to ¥5.84 trillion, down for the sixth consecutive month, and imports declining 1.5 percent to ¥6.80 trillion, the first decline in three months, according to a preliminary report by the Finance Ministry.

Trade tensions between the world’s two biggest economies escalated in the reporting month, with U.S. President Donald Trump imposing heavy sanctions on Chinese telecommunications giant Huawei Technologies Co., citing national security concerns.

Yota Hirono, researcher at the Daiwa Institute of Research, said exports were weak because of the one-off 10-day Golden Week holiday through May 6 in addition to a slowdown in the global economy.

“The trend of sluggish exports is likely to continue in June and beyond as China on June 1 raised tariffs in retaliation for Washington’s hike in duties on Chinese goods and the United States plans additional levies that could cover almost all Chinese items later in the month,” Hirono said.

Japan’s China-bound exports, including semiconductor manufacturing equipment and auto parts, tumbled 9.7 percent from a year earlier for the third straight month of decline.

Imports from China dipped 0.9 percent, leaving Japan with a deficit of ¥391.7 billion against its largest trading partner.

Japan’s trade surplus with the United States grew 14.8 percent to ¥395 billion, up for the third straight month, on solid demand for automobiles, although Trump hopes to reduce Washington’s massive deficit with Tokyo.

With the European Union, Japan had a record trade deficit of ¥251.5 billion due to imports of aircraft from France.

Against the whole of Asia, including China, Japan’s trade surplus plunged 94.1 percent due in part to a decrease in exports of tech-related manufacturing machinery to South Korea as major makers in the country adjusted their production apparently to deal with the negative impact of the U.S.-China trade spat.

The figures were compiled on a customs-cleared basis.

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