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TOKYO – Japan logged a 948.5 billion yen ($8.7 billion) trade deficit in August, the 26th straight month of red ink, as slack demand from China and the U.S. stymied exports, the Finance Ministry said Thursday.
Exports fell 1.3 percent from a year earlier to 5.71 trillion yen ($53.3 billion) while imports dropped 1.5 percent to 6.65 trillion yen ($62.1 billion), resulting in a 948.5 billion yen ($8.8 billion) deficit, according to preliminary data. Japan posted a 971.4 billion yen deficit in August 2013.
A weakening in the value of the Japanese yen has so far failed to spur a rebound in exports, despite a recovering U.S. economy. Slower growth in China, Japan's biggest trading partner, has also hurt.
Consumer spending inside Japan also has been lackluster since an April 1 sales tax, reducing demand for imports.
Japan's exports to China fell 0.2 percent from a year earlier to 1.12 trillion yen ($10.4 billion) while its imports dropped 5.3 percent to 1.35 trillion yen ($12.6 billion), yielding a deficit of 233.9 billion yen ($2.2 billion).
Exports to the U.S. fell 4.4 percent, as car shipments faltered, to 1 trillion yen ($9.5 billion), though imports from the U.S. jumped nearly 11 percent to 637.1 billion ($5.9 billion).
Overall, exports of vehicles, electronics and chemicals fell, while imports of coal and crude oil were lower.
The U.S. dollar hovered near 102 yen in August, as it had for months. In the past few weeks it has risen sharply. By late morning on Thursday it was trading at 108.55 yen.
A weaker yen means higher costs for imported oil and gas, components and other materials, manufacturers in the western industrial city of Osaka told visiting central bank governor Haruhiko Kuroda, local media reported.
Kuroda nonetheless offered an upbeat assessment of current trends, saying the recovery was gaining pace. In a speech posted on the Bank of Japan's website he said Japan would expand its ultra-loose monetary policy, aimed at stimulating growth, "without hesitation," if the outlook deteriorates.
Stronger growth in the U.S. may be crucial to Japan's own recovery, though so far it has had little impact on exports, said Yoshiro Sato of Credit Agricole.
"As we cannot expect too much for export recovery to China and Eurozone, near-term trade balance outlook will increasingly depend on how exports to the U.S. will play out," he said in a commentary.