Japan logs smaller than expected $1.8B trade deficit in June
A weakening Japanese yen has helped export manufacturing, especially for machinery and autos.
TOKYO – Japan’s trade deficit was a smaller than expected $1.8 billion in June, though the rise in exports failed to keep pace with a nearly 12% increase in imports from a year earlier.
A weakening in the Japanese yen over the past nine months has helped export manufacturing, especially for machinery and autos, as shipments have climbed at double-digit rates from a year ago.
But Japan’s trade with China has suffered due to tensions over conflicting claims to islands in the East China Sea. Exports to mainland China rose 4.8% in June to $10.8 billion while its imports from China surged 14.3% to $13.4 billion, nearly doubling Japan’s deficit.
Partly to counter that trend, Japanese Prime Minister Shinzo Abe has made increasing Asian trade and cultivating ties with key resource exporters priorities of what he calls his “economic diplomacy.” Abe also committed Japan to joining a US-led trade initiative, the Trans-Pacific Partnership, which is envisioned as the beginning of what could become a region-wide trade bloc.
Japan is the 12th nation to formally join the TPP negotiations, underway in Malaysia. The goal is to conclude talks this year, but negotiations could prove arduous, given domestic resistance in Japan to eliminating protections for some industries, especially farmers.
The lure for Japan is greater access to the American and other key markets, especially in fast-growing Asia. Including Japan, the dozen countries now participating account for about 40% of world trade.
Japan’s trade figures for June showed exports totalled $60.9 billion in June, up 7.4% year-on-year earlier, while imports rose to $62.7 billion. Exports to the US jumped nearly 15% to $11.4 billion, while imports surged nearly 19% to $5.9 billion.
There were signs of a recovery in trade with crisis-stricken Europe. Exports to the European Union climbed 8.6%, while imports jumped nearly 17%. Imports from the Middle East, mainly of oil and gas, rose 8% to $11.2 billion.
©The Canadian Press