Japan: Trade balance turns negative as exports fall in October
November 21, 2011
In October, exports contracted 3.7% over the same month last year (September: +2.3% year-on-year), which contrasted market expectations of a 1.1% increase. Meanwhile, imports jumped 17.9% (September: +12.1% yoy), coming in above the 15.8% rise anticipated by the market. As a result, the trade balance swung to a deficit of JPY 274 billion (USD 3.6 billion) in October, from a surplus of JPY 296 billion in September. The monthly drop was broad-based, as most of the major categories recorded losses. Electrical machinery, which accounts for around a fifth of total shipments, contracted 12.3% over the same month last year, while transport equipment, which accounts for around a quarter of total exports, declined a more moderate 0.2%. On the other hand, mineral fuel purchases, which account for around a third of total imports, rose 35.6% in October, which was above the 32.5% rise recorded in September. Fuel imports continue to soar, as Japan attempts to compensate shortfalls in the nuclear power industry with increased output in fuel-based power plants. A monthly analysis corroborates the contraction seen in the annual figures, with exports declining a seasonally adjusted 3.5% over the previous month in October, which was well below the 1.4% increase seen in September. On the other hand, imports also confirmed the acceleration suggested in the annual reading, as imports rose 2.8% over the previous month, contrasting September's 2.4% drop.