Japan’s Trade Balance Slips into Red as Exports Decline: Key Insights and Analysis

2023-08-21 23:42:08

Japan’s trade balance slipped back into the red in July with a deficit of 78.7 billion yen ($538 million), as exports fell for the first time in more than two years, official data showed Thursday.

Exports fell 0.3% from a year earlier to 8.73 trillion yen as higher auto shipments failed to offset declines in other products such as truck-related equipment. -drivers, while imports fell 13.5 percent to 8.8 trillion yen, the finance ministry said.

The year-on-year decline in exports, the first since February 2021, dims the outlook for Japan’s economy, which recorded its fastest pace of growth since 2020 in the quarter that ended in June.

The latest figures were released a month following Japan reported its first trade surplus in nearly two years, although concerns persist over the impact of aggressive monetary tightening in the United States and Europe, and the slowing growth in China.

Japan’s trade surplus with the United States rose 65% to 845.92 billion yen, as increased shipments of automobiles and heavy electrical machinery boosted exports 13.5% to hit a record high of 1.79 trillion yen. Imports fell 11.2 percent to 945.31 billion yen, driven by liquefied natural gas and medicines, preliminary data showed.

Exports to China fell 13.4% to 1.54 trillion yen and imports fell 13.9% to 1.90 trillion yen, resulting in a deficit of 359.21 billion yen, down 15.7% from a year earlier.

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