Japan Trade Gap Largest in Near 5 Years

Japan posted a trade deficit of JPY 1.42 trillion in January 2019, compared to a gap of JPY 0.95 trillion in the same month a year earlier and market expectations of a deficit of JPY 1.01 trillion. It is the fourth consecutive monthly gap and the widest since March 2014, as exports fell 8.4 percent, the most since October 2016, to JPY 5.57 trillion, while imports edged down 0.6 percent to JPY 6.99 trillion.

Exports declined 8.4 percent year-on-year to JPY 5.57 trillion in January, worse than market consensus of a 5.5 percent drop and after an upwardly revised 3.9 percent decrease in December. It was the second straight month of falls in shipments and the steepest since October 2016, amid weakening global demand and ongoing trade dispute between China and the US. Sales fell for: transport equipment (-5.9 percent), namely parts of motor vehicles (-3.7 percent); and machinery (-10.7 percent), in particular power generating machine (-2.4 percent) and semicon machinery (-27.8 percent). Also, exports of electrical machinery contracted 8 percent, namely semiconductors (-3.6 percent); and IC (-5 percent); and those of others fell 14.6 percent, mainly due to scientific, optical instruments (-15.8 percent). In addition, sales of chemicals dropped 4.2 percent, in particular organic chemicals (-5.6 percent) and plastic materials (-13.9 percent); and those of manufactured goods  shrank 11 percent, of which iron and steel products (-13.7 percent) and nonferrous metals (-19.2 percent). 

Among major trading partners, overseas sales dropped to Asia (-13.1 percent), in particular to China (-17.4 percent), South Korea (-11.6 percent), Taiwan (-11 percent), and Hong Kong (-21.2 percent). Also, exports fell to Australia (-18.7 percent); Western Europe (-6.6 percent), in particular Germany (-3.3 percent), the UK (-11 percent), and Netherlands (-7 percent); and Middle East (-13.2 percent), namely Saudi Arabia (-14.2 percent). In contrast, exports to the US grew 6.8 percent.

Imports dropped 0.6 percent to JPY 6.99 trillion, less than market expectations of a 2.8 percent fall and following a 1.9 percent growth in December. Purchases of mineral fuels declined 2 percent, namely petroleum (-10.3 percent) and petroleum products (-17.9 percent). Also, imports of electrical machinery shrank 1.5 percent, in particular telephony, telegraphy (-5.1 percent) and telephone sets (-6.6 percent). At the same time, inbound shipments of raw materials decreased 10 percent, namely ore of nonferrous (-18.3 percent) and iron ore and concentrates (-18.5 percent). In contrast, imports rose for: others (1 percent), of which clothing and accessories (6.1 percent), bags (7.5 percent); and chemicals (2.5 percent), in particular medical products (9.8 percent). In addition, purchases of machinery grew 2.3 percent, driven by computers and units (10.5 percent) and those of manufactured goods went up 1.2 percent; namely manufactures of metals (5.3 percent) and iron and steel products (10.3 percent). Also, imports of transport equipment rose 1 percent, mostly aircrafts (71.5 percent) while the ones of motor vehicles fell 19.6 percent.

Purchases decreased from Western Europe (-2.8 percent), in particular Germany (-1.4 percent), Italy (-8.5 percent) and France (-17.9 percent); Middle East (-12.3 percent), in particular Saudi Arabia (-5.3 percent), United Arab Emirates (-4.8 percent) and Qatar (-10.3 percent). By contrast, imports rose from Asia (0.5 percent), of which China (5.6 percent), Taiwan (1.5 percent), and Vietnam (0.7 percent); Australia (19.8 percent); and the US (7.7 percent).

Japan Trade Gap Largest in Near 5 Years

Ministry of Finance l Rida Husna | rida@tradingeconomics.com
2/20/2019 5:00:45 PM