Japan: Trade balance swings to deficit amid cooling global demand
August 22, 2012
In July, exports contracted 8.1% over the same month last year. The decline was below both the 2.3% drop tallied in June and market expectations that had exports decreasing 2.9%. In fact, the reading marked the largest drop in exports since January. Simultaneously, imports rose 2.1%, contrasting the 2.2% drop seen in June and falling short of the 3.0% increase expected by the market. As a result, the trade balance swung to a deficit of JPY 517 billion (USD 6.5 billion), which contrasted the JPY 70 billion surplus recorded in the same month last year and exceeded market expectations of a JPY 270 billion shortfall. The trade balance was dragged down by lower shipments to the European Union, which fell 25.1% annually, and China. On the other hand, purchases of mineral fuels recorded the softest gain since December 2009 as two nuclear plants were restarted in July, thus reducing the need to purchase fuels in order to compensate for the lost of nuclear power generation after the 11 March Tohoku earthquake.