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Japan sees 1st trade deficit in 4 months on rising energy imports

TOKYO (Kyodo) -- Japan logged a trade deficit of 203.37 billion yen ($1.8 billion) in May, the first red ink in four months, as rising energy imports overshadowed continued growth in exports to Asia, government data showed Monday.

    Imports soared 17.8 percent to 6.05 trillion yen, while exports swelled 14.9 percent from a year earlier to 5.85 trillion yen, the Finance Ministry said in a preliminary report.

    Japan relies heavily on energy imports and demand for fossil fuels is growing with most of its nuclear power plants still offline since the March 2011 Fukushima nuclear crisis.

    Imports of liquefied natural gas, coal and crude oil all gained in value terms in May. The average price of crude oil stood at $53.9 a barrel, up 32.3 percent from a year ago, according to the Finance Ministry data.

    "Rising prices of mineral fuels brought a huge impact," a Finance Ministry official said.

    Japan's economy has been boosted by robust demand from the rest of Asia in recent quarters.

    Increased shipments of cars, iron and steel, and ships helped Japan report the 14.9 percent year-on-year gain in overall exports, the largest since January 2015.

    The high export growth was "a rebound" from a year ago when output and shipments were affected by the powerful earthquakes that hit southwestern Japan centering on Kumamoto Prefecture, the ministry official said.

    Japan ran a trade surplus of 411.12 billion yen with the United States as exports gained 11.6 percent from a year earlier to 1.08 trillion yen and imports increased 7.4 percent to 671.30 billion yen.

    Exports to China jumped 23.9 percent to 1.12 trillion yen while imports were up 9.6 percent to 1.43 trillion yen, leading to a 311.84 billion yen trade deficit.

    Japan had a trade deficit of 40.54 billion yen with the European Union, after exports advanced 19.8 percent to 692.37 billion yen and imports rose 12.5 percent to 732.91 billion yen.

    "Expectations for global economic growth have supported trade since around mid-2016...but (such optimism) could pause," said Toru Suehiro, senior market economist at Mizuho Securities Co.

    Suehiro said energy imports and exports are expected to stay around current levels, enabling Japan to register a small trade surplus going forward.

    The positive trade figures were measured on a customs-cleared basis.


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