Ja­pan’s trade deficit widens as its ex­port growth slows

The China Post - - WORLD BUSINESS -

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.

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