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Japan: Exports increase for first time in three months but trade deficit widens

August 20, 2014

In July, nominal yen exports increased 3.9% over the same month last year, which contrasted the 1.9% decrease recorded in June. The rise overshot the 3.4% increase that market analysts had expected, and marked the first growth in three months. However, analysts continue to warn that Prime Minister Shinzo Abe’s policies to stimulate business activity and weaken the yen will not be enough to consistently boost export growth.

Imports increased 2.3% in annual terms in July. The print was well below the 8.4% expansion tallied in June, but contrasted market expectations of a 1.7% decline. Data for July reflected that imports continue to recover from the sales-tax increase that took effect on 1 April, which had dampened consumer demand for overseas products. Purchases of mineral fuel continue to run high due to the ongoing shutdown of nuclear plants triggered by the Tohoku earthquake in March 2011.

The trade balance registered a JPY 964 billion deficit (USD 9.3 billion deficit) in July, which marked a deterioration over the JPY 823 billion shortfall tallied in the previous month, but was smaller than the JPY 1.0 billion deficit recorded in the same month last year. The trailing 12-month sum of the trade balance improved marginally in July, narrowing from the previous month’s JPY 14.3 trillion to 14.2 trillion.


Author: Ricard Torné, Head of Economic Research

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Japan Trade Chart


Japan Trade12m July 2014

Note: 12-month sum of trade balance in USD billion and annual variation of the 12-month sum of exports and imports in %.
Source: Ministry of Finance and FocusEconomics calculations.


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