Japan posted its biggest one-month trade deficit in August as imports surged on high energy costs and a falling yen, exposing the economy’s vulnerability to external price pressures .
The growing trade deficit highlights the fragile nature of Japan’s economic recovery, which has so far remained largely intact despite the high price businesses are paying for imports, compounded by the yen’s fall to a 24-year low. years and the growing prospect of a global slowdown.
Imports jumped 49.9% in the year to August, driven by crude oil, coal and liquefied natural gas (LNG) costs, and pushed the trade deficit to 2.8173 billion yen ($19.71 billion), the largest deficit ever.
The gain in imports beat median market forecasts for a 46.7% rise in a Reuters poll and outpaced a 22.1% year-on-year increase in exports in the same month, ministry data showed. finances.
“Imports are up as high commodity prices persist and supply disruptions have eased, while exports are sluggish,” said Takeshi Minami, chief economist at the Research Institute. Norinchukin.
“Costs will increase if imports increase without any change in the size of the global economy. This will lead to the import of inflation.
The August trade gap marked the 13th consecutive month of year-on-year deficits and was larger than the 2.3982 billion yen deficit expected in a Reuters poll.
The fall of the yen by almost 20% over the past six months has increased import costs, adding to already high energy and raw material costs.
Oil imports from the United Arab Emirates and coal and LNG from Australia strongly boosted overall imports.
By region, exports to China, Japan’s largest trading partner, rose 13.5% year-on-year in value terms on stronger shipments of motor vehicles such as hybrid cars to the country.
Shipments to the world’s largest economy, the United States, rose 33.8% in August, mainly due to higher exports of motor vehicles and parts.
Exports, however, fell 1.2% in volume, the data showed.
“Exports are not increasing in volume even though the yen has weakened so much. It will be difficult for business profitability unless the global economy starts to grow and exports increase,” Minami said.
Japan’s economy grew for a third straight quarter in April-June, data showed last week, as the lifting of local COVID-19 restrictions boosted consumer and business spending.
Analysts, however, say the country’s recovery remains fragile as consumers and business activity face risks such as a slowdown in global growth and monetary policy tightening by many central banks around the world.
($1 = 142.9700 yen)