Japan posts record annual trade deficit as import bill soars
Japan's trade shortfall was 11.5 trillion yen, almost double the previous year's 6.9 trillion yen
Tokyo: Japan reported a record annual trade deficit last year as energy shipments and weakness in the yen pumped up the nation’s import bill.
The shortfall was 11.5 trillion yen ($113 billion), almost double the previous year’s 6.9 trillion yen, a finance ministry report showed in Tokyo on Monday. Imports rose 25% in December from a year earlier and exports gained 15%, leaving a monthly deficit of 1.3 trillion yen.
A record 18 straight monthly deficits show how nuclear plant shutdowns, higher import costs, and limited gains in export volumes are dragging on Prime Minister Shinzo Abe’s efforts to sustain momentum in the world’s third-biggest economy. Goldman Sachs Group Inc. said on Sunday that monthly shortfalls of about 1 trillion yen may persist for some time.
“It’s hard to anticipate when Japan can emerge from trade deficits at this point," said Takeshi Minami, chief economist at Norinchukin Research Institute. “If a trade deficit as a result of high energy import costs makes Japan look like a high-cost country, it may discourage moves by companies to have production centers in Japan and undermine Abenomics."
The lack of export momentum may also be affected by Japanese firms developing business overseas and also their falling competitiveness, some Bank of Japan board members said in the minutes released today of its December policy meeting.
The Topix index was down 2.6% at 1,231.97 at 9:46am in Tokyo, after the yen rallied to a seven-week high and US equities tumbled on concern that the global economy recovery will falter. The yen was little changed against the dollar.
Energy bill
Last year’s import bill was inflated by a 16% in crude oil shipments to Japan and an 18% rise in liquefied natural gas imports.
While Abe wants to restart the nuclear plants, Morihiro Hosokawa, a former prime minister who’s running to become governor of Tokyo, is bidding to shutter them permanently. Winning the 9 February election would provide Hosokawa with a platform to oppose Abe’s efforts.
“Fuel import volumes will decrease if nuclear power plants are restarted, but not immediately as it depends on the pace and timing of restarts," Kazuyoshi Nakata, an economist at Mitsubishi UFJ Research & Consulting Co., said before the data.
The December figures compared with median estimates in a Bloomberg News survey of analysts for an increase in imports of 26% from a year earlier, a gain in exports of 18%, and a trade shortfall of about 1.2 trillion yen. Bloomberg
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