Japan: Trade deficit continues to widen amid weaker yen
February 20, 2013
Exports improved at the outset of the year, showing their first positive growth in the last eight months. In January, nominal yen exports expanded 6.4% over the same month last year, which contrasted the 5.8% drop seen in December. In addition, the print overshot market expectations of a 5.6% rise. As a result, in the 12 months up to January exports were 1.6% below the level recorded in the same period last year, which, nevertheless, represents an improvement over the 2.7% drop seen in December.
Meanwhile, imports increased 7.3% in annual terms in January. The print followed the 1.9% rise tallied in December and came in well above market expectations that had imports expanding a mild 1.6%. As a result of the monthly reading, the moving 12-month sum of imports rose 3.6% over the same period last year (December: +3.8% yoy). Imports accelerated by the weakening of the currency, which bolstered the bill of shipments from abroad, particularly of fossil fuels.
The trade balance registered a deficit of JPY 1.6 trillion (USD 17.1 billion) in January. The print was larger than the JPY 1.5 trillion shortfall observed in the same month last year and marked, in fact, the biggest trade deficit on record. Accordingly, the trailing 12-month sum of the trade deficit widened from JPY 6.9 trillion in December to JPY 7.1 trillion in January.