Japan’s trade deficit widens as its export growth slows
Japan’s trade deficit widened to its largest level in five months in July, as exports slowed thanks to faltering demand in mainland China and other key markets, and imports fell by less than forecast.
The 268.1 billion yen (US$2.2 billion) deficit reported Wednesday compared with a deficit of 70.5 billion yen (US$566 million) in June. Exports rose 7.6 percent from the year before to 6.7 trillion yen (US$53.5 billion) while imports fell 3.2 percent to 6.9 trillion yen (US$55.7 billion).
Lower costs for imports of oil and gas have reduced Japan’s trade deficit in recent months, and the deficit in July was 72 percent lower than in the same month a year earlier. However, imports have not fallen as much as expected, with weakness in the yen countering that trend.
Mainland China’s recent move to devalue the yuan, making its own products more price competitive in overseas markets, has further deepened unease over the trade outlook.
Asian exporters are all seeing a weakening in exports, accentuated by slowing Chinese demand, Mizuho Bank noted in a research note.
“Commodity exporters are the worst hit given mainland China’s heft in commodities, but there is also little doubt that Asian manufacturing exporters have also fared poorly, even in the face of an entrenched U.S. recovery,” it said.