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19 November 2018
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Japan trade (The Total Investment & Insurance Solutions)
Japan's trade deficit grew to its largest since July 2015 in October as
a gain in exports was outpaced by a nearly 20 percent jump in imports.
The Ministry of Finance said Monday that
exports grew at an 8.2 percent annual pace. In September, exports had fallen
1.2 percent from the previous year in the first decline for the world's third
largest economy since 2016, largely due to natural disasters.
Japan racked up a trade deficit of 449
billion yen ($4 billion), the preliminary data showed.
The politically sensitive trade surplus with
the United States fell 11 percent to 573.4 billion yen ($5.1 billion) as
Japan's imports from the U.S. jumped 34 percent, including imports of food,
oil, steel and other metals and machinery. Exports to the U.S. grew nearly 12
percent, mostly in autos, machinery, medical products and rubber, to 1.43
trillion yen ($12 billion).
That may help ease trade tensions after
President Donald Trump imposed penalty tariffs on billions of dollars' worth of
Chinese exports.
China was Japan's biggest export market,
taking shipments worth 1.48 trillion yen ($13 billion), a 9 percent increase
over the same month a year earlier, while its imports from China jumped 16
percent to 1.9 trillion yen ($16 billion).
While trade with both China and the United
States has remained resilient despite a tit-for-tat tariffs war between those
two countries, overall trade recently has been a drag on growth and the outlook
for exports is not promising, economists say.
Cabinet Office data released last week showed
the Japanese economy contracted at annualized rate of 1.2 percent in
July-September, as consumer spending, investment and exports slipped.
Natural disasters have also taken a toll.
That includes the closure of a major airport in the western Kansai area after a
typhoon and a major earthquake that hit the northernmost island of Hokkaido,
causing fatal landslides and widespread blackouts.
Prime Minister Shinzo Abe's
deflation-fighting stimulus program of cheap credit has helped keep the economy
growing for most of the past decade despite stagnation in domestic markets as
the population ages and shrinks.
Junichi Makino, chief economist with SMBC
Nikko, expressed optimism, noting auto exports to the U.S. remain strong and
tariffs imposed by the U.S. on Japanese steel and aluminum exports are a tiny
part of overall pan-Pacific trade.
The trade deficit may also level off as oil
prices stabilize: resource scarce Japan remains heavily dependent on imports of
oil, gas and coal.
But further slowing of the Chinese economy or
a global weakening in investment could cause broader damage, he said.
"We must remain cautious," he said.The Total Investment & Insurance
Solutions
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