TOKYO, Dec. 18 (Xinhua) -- Japan's trade deficit widened for a 17th consecutive month in November to 1.29 trillion yen (around 12. 6 billion U.S. dollars), as a weak yen and rising import costs for fossil fuels outweighed an uptick in exports, the Ministry of Finance said in a report on Wednesday.
The latest figure compares to a 1.31 trillion yen deficit expected by median economists in the recording period and marks a 35.1-percent increase from the same time a year earlier.
The deficit for November is the third-widest gap since the finance ministry started keeping records in 1979, with the record run of monthly deficits taking its toll, as energy imports continue to ensure Japan's balance book stays in the red.
Japanese policymakers leaning hard on the finance ministry and especially the Bank of Japan (BOJ) to ease its monetary policy and weaken the yen, in a bid to increase demand for Japanese goods from overseas markets, has served its purpose and export-reliant Japan saw an 18.4-percent rise of goods shipped overseas in the recording period, compared to a year earlier, the data showed.
Takeshi Minami, a chief economist at Norinchukin Research Institute, said that Wednesday's data shows there has been an ongoing trend towards rising exports and that this reflects a gradual recovery in the global economy. But he also explained that the pace of the global economic recovery would be a protracted process.
Minami added that the trade deficit will likely continue as long as Japan's nuclear reactors remain offline and unless the global economic recovery undergoes a dramatic shift and the reactors are brought back online relatively quickly, both of which, he highlighted, are unlikely, the red ink would continue.
According to Minami and other economists, with Japan's currency falling to a five-year low against the U.S. dollar last week at 103.92 and sliding a further 0.2 percent to 102.88 as markets opened Wednesday, Japan's import costs for fossil fuels, to compensate for the lack of domestic nuclear power, is continuing to contribute to the string of red ink.
Imports rose 21.1 percent in the year to November, compared to a 21.4 percent rise expected by median economists, with the continued shortfall owing to the ongoing crisis concerning Japan' s insufficient power supply.
Japan's nuclear reactors remain shuttered pending safety inspections following the 2011 nuclear disaster in Fukushima Prefecture, which saw a massive earthquake-triggered tsunami causing multiple meltdowns at the Daiichi nuclear complex.
As such, resource-poor Japan relies on Middle Eastern nations for a significant amount of its crude oil imports, with more than 90 percent of all its total energy resources coming from overseas and with a weaker yen, these import prices balloon, economists have noted.
Due to weak net exports and stunted economic growth in the July- to September quarter, government policymakers are introducing fiscal mechanisms to try and sustain momentum in the world's third-largest economy, economists said.
They expect a one-quarter contraction in the April to June period next year, when the tax increases from 5 percent to 8 percent and consumer sentiment diminishes.
Before the hike, economists expects an economic uptick, although this will be short-lived and unsustainable as consumers rush to buy consumables prior to the consumption tax being raised and rein in spending thereafter.
Akiyoshi Takumori, a chief economist at Sumitomo Mitsui Asset Management Co. in Tokyo said that he expects the deficit will shrink from April with exports seeing an uptick. He added that imports will likely be balanced out on increased domestic demand ahead of the sales tax hike.
Similarly, Yoshiki Shinke, a chief economist at Dai-ichi Life Research Institute in Tokyo, suggested that imports will change direction on increased purchases of smartphones and tablet devices from overseas at the last minute, prior to the April tax hike.
However, the nation's exports remain relatively healthy, economists here noted, and despite the impending downside economic risks posed by the ongoing energy crisis, rising fuel costs, weakening yen and dwindling domestic demand following the tax hike, on a customs cleared basis, exports to China increased 33.1 percent from a year earlier and shipments to the U.S. climbed 21.2 percent. Shipments to the European Union, meanwhile, gained 19.4 percent, the ministry's figures showed Wednesday.
Japan's imports of petroleum gained 34.9 percent and liquefied natural gas climbed 37.4 percent in the recording period, from a year earlier, the ministry said, while shipments to Japan of electrical machinery saw a rise of 22.6 percent, according to the latest statistics.
Japan's Nov. trade in red for record 17th consecutive month
TOKYO, Dec. 18 (Xinhua) -- Trade for November in Japan stayed in red for a record 17 consecutive month, standing at 1.29 trillion yen (about 12.57 billion U.S. dollars) in the month, said the Japanese government Wednesday.
Japan's Finance Ministry said in a preliminary report that, on a customs-cleared basis, the country's exports rose 18.4 percent from a year earlier, while imports jumped 21.1 percent. Full story