Japan Trade


Japan: Weak trade data suggest the economy is slowing

June 18, 2014

In May, nominal yen exports fell 2.7% over the same month last year, which contrasted the 5.1% increase recorded in April and marked the largest decline in 15 months. The contraction exceeded the 1.3% decrease that market analysts had expected.

Imports dropped 3.6% in annual terms in May, which contrasted both the 3.4% increase tallied in the previous month and the 1.8% expansion that market analysts had expected. In addition, the print represented the steepest contraction since August 2012. Imports cooled down following the sales-tax increase that took effect on 1 April, which dampened consumer demand for overseas products. In particular, mineral fuel imports declined sharply in May following a buildup in inventories early this year. An environmental tax on energy also played a role in the moderation in imports.

The trade balance registered a JPY 909 billion deficit (USD 8.9 billion) in May, which marked a deterioration over the JPY 812 billion shortfall tallied in the previous month, but it was smaller than the JPY 991 billion deficit recorded in the same month last year. The trailing 12-month sum of the trade deficit inched down from the previous month’s JPY 13.7 trillion to 13.6 trillion in May.

Author: Ricard Torné, Lead Economist

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Japan Trade Chart

Japan Trade12m May 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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