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Japan: Trade deficit falls in January on weakening yen and falling oil prices

February 19, 2015

In January, nominal exports valued in yen expanded 17.0% over the same month last year, which represented a significant acceleration over the 12.8% increase recorded in December. The rise overshot the 13.5% expansion that market analysts had expected and represented the fastest pace of growth since November 2013. The strong rise in exports mostly reflected the weakening of the yen, which is currently trading at multi-year lows.

Imports plummeted in January, as the decline in oil prices is cutting costs. Imports fell 9.0% in annual terms, which contrasted the 1.9% increase tallied in December. The contraction exceeded the 4.9% drop that market analysts had expected and represented the largest drop in over five years.

As a result of the strong performance in overseas shipments and the sharp drop in imports, the trade deficit narrowed to JPY 1.2 billion (USD 9.9 billion) in January from JPY 2.8 billion in January 2014. Moreover, the print marked the smallest shortfall in 10 months and was less than the JPY 1.7 billion deficit economists had expected. In the 12 months up to January, the trade deficit was JPY 11.2 trillion, which was down from the JPY 12.8 trillion shortfall that was recorded in the previous month.


Author: Ricard Torné, Lead Economist

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Japan Trade Chart


Japan Trade12m January 2015

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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