TOKYO: Japan posted a bigger-than-forecast trade deficit in January as auto exports declined and energy import costs increased.
Economists cautioned against reading the single month’s figures negatively, noting that global demand should support Japanese exports this year. Exports rose 1.3 percent from a year earlier (versus +5 percent estimate).
Imports climbed for the first time in two years, by 8.5 percent (versus +4.8 percent estimate). Trade deficit for January was 1.1 trillion yen ($9.6 billion), compared with expectations for a deficit of about 625.9 billion yen.
A 6.6 percent drop in exports to the U.S. reflected a slide in car sales that underscores the preference of many American consumers for SUVs relative to Japanese sedans, according to the government in Tokyo.
This may assist Finance Minister Taro Aso when he gets into bilateral talks on trade and the economy in April with Vice President Mike Pence. The threat of U.S. protectionism remains a large risk for Japan, even after the warm welcome Abe received from President Donald Trump earlier this month.
Exports to the U.S. fell 6.6 percent from a year earlier. Shipments to the EU decreased 5.6 percent. Sales to China, Japan’s largest trading partner, climbed 3.1 percent. The value of exports of motor vehicle fell 6.7 percent. Crude oil imports jumped almost 36 percent by value, contributing 2.8 percent of the rise in total imports. The January data included for the first time imported shale gas from the U.S. Chinese coal imports pushed up prices for the commodity. Export volumes declined 0.3 percent.
