Japan in record deficit

Japan back in deficit as imports rise

Japan slipped back into a trade deficit in July, as exports languished and imports of gas and generating equipment surged, reports the Ministry of Finance.

NZ Herald,

22 August, 2012

The deficit was 517.4 billion ($8 billion) in July, according to provisional trade figures. That compares with a 69.7 billion surplus a year earlier and a modest surplus of 62 million in June of this year.

Exports fell 8 per cent from a year earlier in July to 5.3 trillion, while imports rose 2 per cent to 5.83 trillion, the ministry said.

Japan has managed to eke out small trade surpluses in some months over the last year, but reported a record annual trade deficit for the fiscal year that ended in March.

The strong Japanese yen has hurt exports, as have disruptions caused by last year's earthquake and tsunami disaster in northeastern Japan, which hampered production of vehicles and electronics.

Exports have also suffered from weaker European demand due to the debt crisis.

A look at the figures for July shows sharp drops in exports of consumer electronics, customarily a mainstay for Japan's economy.

Japan posted its biggest half-year trade deficit ever in January-June, 2.9 trillion, as exports weakened and fuel imports soared to keep power going despite shutdowns of most of the country's nuclear reactors.

Just to clarify - this is Japan's worst deficit ever.

From the Guardian

Japan suffers record trade deficit

Japan posted some alarmingly weak trade data overnight, fuelling fears that the eurozone crisis is now having a severe impact on the world economy.

The Japanese trade gap with the rest of the world hit 517.4bn yen, or £4.1bn, last month, a record deficit for a July.

This was driven by a 25% slump in exports to the European Union compared with July 2011, while imports from the EU jumped by over 10%.

Another reason to fret - Japan's exports to China fell by 11.9% during July.

Mike van Dulken, head of research at Accendo Market, commented:

Japanese trade data showed a plunge in July exports, signalling continuing global world weakness, most notably from neighbouring China, but also from the US and Eurozone where growth remains hampered by a slow recovery/double-dip recession.

http://www.guardian.co.uk/business/2012/aug/22/eurozone-crisis-greece-pm-samaras-cuts#block-50348cbbb579b8532ead4230