Japan: Strong imports cause trade balance to swing to deficit in May
June 19, 2017
Nominal exports valued in yen increased 14.9% from the same month last year in May, following April’s 7.5% increase. The print undershot the 16.0% increase that market analysts had expected and represented the largest expansion in over two years. The external sector is benefiting from a weak yen and strong global demand.
Imports expanded 17.8% annually in May, which followed April’s 15.2% increase. The print exceeded the 14.5% rise that the markets had expected and represented the biggest rise in more than three years. Higher prices for raw materials and a vibrant manufacturing output are pushing up imports.
As a result of the strong rise in imports, the trade balance swung from a JPY 481 billion surplus in in April to a JPY 204 billion deficit in May (May 2016: JPY 47 billion). In the 12 months up to May, the trade surplus inched down to JPY 3.5 trillion, which was lower than the JPY 3.7 trillion surplus recorded in the previous month.