Japan: Trade deficit widens to a record high in January
February 20, 2012
In January, exports contracted 9.3% over the same month last year (December: -8.0% year-on-year), broadly in line with market expectations. In contrast, imports grew 9.8% (December: +8.1% yoy), coming in slightly above the 9.6% rise anticipated by the market. As a result, the trade deficit widened sharply from the JPY 206 billion (USD 2.6 billion) registered in December to the JPY 1.5 trillion (USD 19.2 billion) observed in January, marking, in fact, the largest deficit on record. The deterioration in exports was broad-based, as all of the major categories recorded losses, particularly manufactured goods and electrical machinery. Moreover, shipments to China, Japan's largest export market, plummeted 20.1%, mainly due to seasonal effects stemming from the Chinese Lunar New Year holidays. On the other hand, mineral fuel purchases, which account for around a third of total imports, remained buoyant, as Japan seeks to compensate for shortfalls in the nuclear power industry by importing fuel.