Japan: Trade deficit widens in April
May 23, 2012
In April, exports rose 7.9% over the same month last year, which overshot the previous month's 5.9% increase but came in below market expectations that had shipments expanding 11.8%. That said, exports grew at the fastest pace since February 2011, just before the devastating Tohoku earthquake. On the other hand, imports grew 8.0% (March: +10.6% year-on-year), coming in below the 10.1% rise anticipated by the market. As a result, the trade deficit fell further from JPY 85 billion in March (USD 1.0 billion) to JPY 520 billion in April (USD 6.4 billion). The improvement in exports was broad-based, as most of the major categories recorded better readings than in the previous month, particularly transport equipment. Meanwhile, imports continued to expand at a solid rhythm on the back of solid purchases of fossil fuels, which account for around a third of total imports, and remained buoyant due to the need to generate electric power. Currently, Japan has switched off all its nuclear reactors, which are likely to provoke blackouts during the peak summer period. However, on 17 May, Prime Minister Yoshihiko Noda said that the government will soon decide whether to restart two nuclear reactors at the Oi nuclear plant.