Japan records trade deficit in August

Tokyo: Japan’s exports fell 0.8 per cent last month from a year earlier, with steep declines in shipments to China and the rest of Asia, its largest regional market.

Imports sank nearly 18 per cent, the Japanese Finance Ministry said in preliminary data released Wednesday. That left a trade deficit of 930.5 billion yen ($6.3 billion) in August, for the second straight month of red ink, it said. Exports to Asian markets fell 8.8 per cent, while imports dropped about 13 per cent. A large share of that was an 11 per cent drop in the value of shipments to China, whose economy has slowed in recent months as a hoped-for rebound from disruptions of the COVID-19 pandemic fizzled.

“We think the weak recovery in China will continue to have a negative impact on exports for a while, but semiconductors seem like they are bottoming out from the down cycle,” Robert Carnell, regional head of research Asia-Pacific at ING, said in a report. He said the strong contribution to economic growth in the April-July quarter was expected to weaken in this quarter. Japan’s exports to the US climbed 5.1 per cent, helped by robust demand for vehicles. Exports to the European Union jumped 12.7 per cent from a year earlier. By product category, total auto exports jumped 40.9 per cent year-on-year and semiconductor exports gained 8.1 per cent. Exports in chemicals declined 11.7 per cent and machinery exports slipped 9.6 per cent.

China announced on August 24 that it was suspending all seafood imports from Japan after treated radioactive water began to be released into the Pacific Ocean from the wrecked Fukushima Dai-ichi nuclear plant in northern Japan. That may have some impact on imports from Japan in September and beyond, but Japan’s overall exports of food to China accounted for only a 1 per cent share of the total, even if they did fall 41 per cent from a year earlier.