Japan’s trade deficit widened to 1.45 trillion yen in March, a record figure spurred by a weak yen that pushed up the cost of imports as export growth remains sluggish.
The nation’s overall imports jumped 18.1 percent last month, due to ballooning energy costs. The energy-hungry country imported 8.1 percent more Liquefied Petroleum Gas (LPG) in March compared to the same month last year, according to the latest trade data. Imports of Liquefied Natural Gas (LNG) rose nearly 4 percent.
Analysts also said the jump in imports in March may have been caused by last-minute surge in consumer spending ahead of Japan’s recent sales tax hike in April 1.
Meanwhile, exports rose 1.8 percent to 6.38 trillion yen, driven by higher shipment of cars and processed fuel products. Overall, Japanese exports increased 0.6 percent by volume last fiscal year, data showed, while imports rose 2.4 percent by volume.
“Import volume growth appeared stronger than we had envisaged,” Hiromichi Shirakawa, the Swiss bank’s chief Japan economist said.
Analysts said there is a constant risk of increasing imports and widening trade gaps.
“In spite of the continued weaker yen, the performance of Japanese exporters is quite weak compared to competitors like Korea or Taiwan,” said Junko Nishioka, chief Japan economist at Royal Bank of Scotland Group Plc in Tokyo.
Compared to figures prior to the March 2011 disaster, “a weaker yen hasn’t increased export volume as much as it used to,” she said.
The yen was down 0.2 percent at 102.63 as of 11:46 am in Tokyo today, Bloomberg reports.
“Japan’s trade deficits may continue for at least three years,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co.
Prime Minister Shinzo Abe is looking to restart some of Japan’s shuttered nuclear plants in a bid to lessen the country’s reliance on imported energy.
By Maesie Bertumen
Image: “Salaryman waiting on the Bullet Train” by Trey Ratcliff/Flickr