Japan logs trade deficit for 1st time in 8 months

February 19, 2018

Tokyo- Japan posted a customs-cleared trade deficit of 943.4 billion yen in January, the first red ink in eight months, the Finance Ministry said in a preliminary report Monday.

But Japan's steel exports to the United States marked a steep rise of some 40 percent from a year before at a time when US President Donald Trump is considering a range of measures, including tariffs or import quotas.

The overall trade deficit was smaller than the 1,091.9 billion yen a year before. The result came against a median forecast of 1,003.6 billion yen in deficit among 21 research institutes surveyed by Jiji Press.

Japan's exports rose 12.2 percent to 6,085.6 billion yen, up for the 14th straight month, reflecting increases in shipments of hybrid vehicles and chipmaking equipment to China. Imports grew 7.9 percent to 7,029 billion yen, led by crude and raw oil, as well as medical products.

The growth in exports was limited due to New Year holidays, while imports were pushed up by higher crude oil prices, ministry officials said.

Japan's trade surplus with the United States shrank 12.3 percent to 349.6 billion yen, down for the second consecutive month.

Exports went up 1.2 percent, but imports expanded a steeper 9.4 percent. Auto exports decreased, while imports of liquefied petroleum gas and mixed fuel products rose.

US-bound steel exports, however, surged 38.5 percent on the back of robust local demand.

With the US Commerce Department having recently recommended Trump to consider measures to curb steel and aluminum imports from all trade partners for national security reasons, the increase of Japanese steel shipments may cause trade friction between the two nations.

In trade with mainland China, Japan posted a deficit of 578.6 billion yen, smaller than the year-earlier deficit of 910.6 billion yen.

Exports jumped 30.8 percent to 1,160 billion yen, a record high for January, while imports dropped 3.3 percent to 1,738.7 billion yen.

Japanese exports to greater China usually fall in the Lunar New Year holidays as local plants suspend production. But exports in the reporting month increased because the holiday period started in February this year, compared with late January last year. Jiji Press