TOKYO: Japan logged its first trade deficit in five months in January, official data showed on Monday, as higher energy prices overwhelmed slower growth in exports due to the lunar new year. The country routinely falls into deficit in January due to the lunar new year celebrations in key trade partners such as China, which sees an extended holiday. But Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co in Tokyo, said that the export weakness would not last.
“Exports are still on the recovery track,” he told Bloomberg News.”The global economy is steadily recovering.
“There?s no change to the view that Japan?s economy is driven by external demand while domestic demand is remaining weak.”
Prime Minister Shinzo Abe has been trying to kickstart growth for more than four years with a policy of spending, central bank policy easing and structural reform, but the outcome has been mostly disappointing.
Inflation and consumer spending are weak, and companies have been reluctant to boost wages in the world’s third-largest economy.
For January, the trade deficit came to 1.08 trillion yen ($9.6 billion), expanding 67.8 per cent from the same month a year ago.
The deficit was the first since August and marked a sharp reversal from a surplus of 640 billion yen in December.
Japan’s China-bound exports increased 3.1 per cent in January, sharply lower than the 12.4 per cent jump seen in December. Imports from China, meanwhile, rose 7.2 per cent, resulting in Japan recording its 59th straight monthly deficit against Asia’s largest economy. — AFP
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