Japan: Trade deficit widens as exports dip in November
December 21, 2011
In November, exports contracted 4.5% over the same month last year (October: -3.8% year-on-year), which was roughly in line with market expectations of a 4.3% decline. Meanwhile, imports grew 11.4% (October: +17.9% yoy), coming in above the 8.3% rise anticipated by the market. As a result, the trade deficit continued to widen from the JPY 280 billion (USD 3.6 billion) recorded in October to the JPY 685 billion (USD 8.8 billion) registered in November. The monthly drop was broad-based, as most of the major categories recorded losses. Chemical products, which account for around a tenth of total shipments, contracted 12.5% over the same month last year. Moreover, electrical machinery, which accounts for around a fifth of total shipments, contracted 10.7%, whereas transport equipment, which accounts for around a quarter of total exports, rose 3.9%. On the other hand, mineral fuel purchases, which account for around a third of total imports, expanded 28.1% in November. Fuel imports continue to soar, as Japan attempts to compensate shortfalls in the nuclear power industry with increased output in fuel-based power plants. Moreover, Japanese trade with Thailand plummeted in November due to the flooding, which brought the Thai economy to a standstill. A monthly analysis corroborates the contraction seen in the annual figures, with exports declining a seasonally adjusted 2.6% over the previous month in November, which was, nevertheless, above the 4.0% drop seen in October.