Japan reported a wider-than-expected trade deficit in February as an energy-driven surge in import costs, caused by massive supply constraints, added to vulnerabilities for the world's third-largest economy.
Exports rose slightly less than expected despite a rebound in China-bound shipments, in a worrying sign for an economy facing growing uncertainty from supply challenges and Russia's invasion of Ukraine.
"There's a big likelihood the trade deficit will expand further," said Takeshi Minami, chief economist at Norinchukin Research Institute. "Although car exports picked up in February, they aren't in a situation of growing steadily due to supply disruptions and a chip shortage, while imports are swelling as oil and raw material prices soar."