Japan posted a smaller-than-expected trade deficit of US$9.6 billion for August, as exports to Europe and other Asian countries plunged, further undermining hopes for an export-driven revival.
The 754.1 billion yen (US$9.6 billion) deficit in August was smaller than the US$9.9 billion deficit reported a year earlier, the Finance Ministry reported Thursday.
Exports in August totaled 5.05 trillion yen (US$64.33 billion), down 5.8 per cent from a year earlier, while imports fell 5.4 per cent to 5.8 trillion yen (US$73.9 billion).
The strong Japanese yen has bit into exports while demand has evaporated in crisis-stricken Europe. Meanwhile, the country’s energy imports have risen following closures of most of its nuclear plants.
Japan has eked out small trade surpluses in some months this year but reported a record annual trade deficit for the fiscal year that ended in March.
Though the deficit for August was lower than the more than 800 billion yen that some analysts had forecast, prolonged weakness in Europe and recent friction with China, Japan’s biggest single overseas market, suggest it will likely persist in coming months.
Exports to Europe sank 28 per cent in August from a year earlier, to 484.9 billion yen (US$6.2 billion) while exports to Asia — Japan’s biggest overseas market — sank 6.7 per cent overall to 2.84 trillion yen (US$36.2 billion).