Japan: Trade balance registers a deficit in May
June 20, 2016
In May, nominal exports valued in yen declined 11.3% over the same month last year, which followed the 10.1% decrease recorded in April. The fall was steeper than the 10% drop market analysts had expected. A strong yen, tepid global demand and supply chain disruptions caused by a series of earthquakes in April are weighing on Japan’s external sector.
Imports contracted 13.8% annually in May, which was up from April’s 23.3% drop but marked the 17th consecutive monthly decline. The print was in line with market expectations. Imports continued to decline at double-digit rates mainly due to low energy prices.
As a result, the trade balance recorded a JPY 41 billion deficit (USD 0.4 billion) in May. The reading was an improvement from the JPY 215 billion deficit tallied in the same month of the previous year. In the 12 months up to May, the trade account was balanced, which was up from the JPY 0.2 trillion shortfall that was recorded in the 12 months up to April and represented the highest reading since September 2011.
Author: Christopher Mc Innes, Economist