Japan trade deficit hits record as relations with China poisoned
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Japan trade deficit hits record as relations with China poisoned

Last Updated: Monday, October 22, 2012, 15:02
 
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Japan trade deficit hits record as relations with China poisoned
Tokyo: Japan registered its biggest-ever trade deficit for a half of a fiscal year, in a sign that the sovereign debt crisis in Europe and the strained relationship with China over a territorial dispute have eroded Japanese exports, government data showed today.

For the first half of fiscal 2012 through September, Japan logged about USD 40.6 billion (3,219 billion yen) in goods trade deficit, up 90.1 percent from a year earlier and the biggest since the Finance Ministry began recording in 1979.

In September alone, the deficit stood at 558.6 billion yen, the third straight month of red ink and the largest for the month of September, the ministry said in a preliminary report, augmenting fears that violent anti-Japan rallies and boycotting of Japanese products in China have weighed on the exports to the biggest trading partner.

Exports in the first half decelerated 2.0 percent from the same period of fiscal 2011 to 32,160.3 billion yen on declines in semiconductors and other electronic devices to Europe, particularly Germany, after the eurozone crisis deteriorated consumer and business sentiments in the area.

Imports grew 2.6 percent to 35,379.3 billion yen on increases in mineral fuels, including liquefied natural gas and crude oil from the Middle East, as domestic utilities have boosted thermal power generation to cover the loss of nearly all atomic power due to reactor shutdowns following the Fukushima nuclear crisis.

The figures are measured on a customs-cleared basis.

Exports to China fell 8.2 percent to 5,921.1 billion yen in the first half and slid 14.1 percent to 953.8 billion yen in September, sharper than the 9.9 percent fall in August. It was the fourth consecutive month of deficit as various products, ranging from auto and auto parts to steel and semiconductors, declined notably.

The balance showed Japan suffered the biggest September deficit with China of 329.5 billion yen, as imports gained 3.8 percent to 1,283.3 billion yen.

Resentment in China has accelerated since the Japanese government decided last month to nationalize part of an island group in the East China Sea, also claimed by Beijing and Taiwan.

"It is possible that the deteriorating Japan-China relations have adversely affected (Japanese) exports. We need to closely watch any future development," Mitsumaru Kumagai, chief economist at the Daiwa Institute of Research, said in his report, underscoring a sharper loss in Japan's auto exports to China.

The Chinese economy has been slowing amid the global downturn in the wake of the crisis in Europe.

This has already hit growth in Japanese exports to China, Kumagai added.

PTI



First Published: Monday, October 22, 2012, 15:02


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