TOKYO: Japan’s imports and exports set records in July and soaring energy costs and a weak yen helped extend a trade deficit for a third month, government data showed.
Japan's trade deficit totaled 634.5 billion yen (US$4 billion) last month, marking the third straight month of red ink, the Finance Ministry said in a preliminary report Thursday (Aug 20).
Imports surged 27.8 per cent from the same month a year ago to a seasonally adjusted 12.15 trillion yen (US$77 billion).
The war in Iran has sent crude oil prices soaring. Japan, which imports almost all its oil, previously relieved heavily on oil imports from the Middle East through the Strait of Hormuz, which remains effectively closed.
Exports rose 23.2 per cent to 11.51 trillion yen US($73 billion), as auto exports to the US and other nations remained strong. Shipments of semiconductors and other electronic devices were also healthy. Japan’s exports have now grown every month for almost a year.
By value, both imports and exports rose to the highest levels in July, since comparable data became available in January 1979, according to the ministry.
Japan has been seeking alternative sources for energy imports, including the US.
Japan’s central bank has intervened to prop up the currency, but that has had little lasting impact. The yen’s weakness is related to larger causes like Japan’s socioeconomic clout, which has been weakening, analysts say.
The US dollar is trading at about 158 yen lately, lower than the levels in July, when it cost more than 160 yen, but still higher than what it was a year ago at 140 yen.
A weak yen can work as a boon for Japan’s giant exporters, like Toyota Motor Corp., because it boosts the value of overseas earnings.
Toyota and other exporters have reported hefty earnings recently, raking in the benefits of the weak yen.
But the weak yen makes raw materials and other essentials such as food and oil more expensive when purchased abroad.
Analysts increasingly have said Prime Minister Sanae Takaichi's policies have had minimal effect so far in turning around Japan’s economy.
Still, she is likely to stay in power, at least for the next several months, as no election is scheduled and her popularity with voters remains relatively high. - AP
