Japan Records Trade Deficit for the Fourth Month Straight despite Export Recovery

AP

12:00 JST, November 20, 2024

TOKYO (AP) — Japan racked up a trade deficit in October for a fourth straight month as a weak yen and the rising price of energy kept import costs high.

The trade deficit, which amounts to a nation’s imports subtracted from its exports, totaled 461 billion yen ($3 billion) in red ink last month, the Finance Ministry reported Wednesday.

Japan’s exports in October managed to recover from a slowdown over the recent months, gaining 3.1% from the same month a year earlier, as shipments grew in equipment for semiconductor production.

But imports, which grew 0.4% from the previous year, were still bigger than exports.

A major uncertainty over trade is looming because of the reelection of Donald Trump as U.S. president. Worries are great about portending higher tariffs.

Exports are a chief engine of growth for Japan, the home of Toyota Motor Corp., although such manufacturers have moved production and investment abroad.

New Prime Minister Shigeru Ishiba has been busy meeting the leaders of Asian nations, as well as Europe and South America, to forge economic and trade relations, as well as security ties. Ishiba, who has yet to meet Trump, was recently in Brazil for the Group of 20 summit.

A weakening currency, which tends to accompany trailing growth, is another worry for Japan. The U.S. dollar has been trading at about 155 Japanese yen recently, up from 140-yen levels a year ago.

Inflation and rising energy prices are pushing up import costs, while slowing global demand dampens exports.

But the recent fall in overseas demand is believed to be partly due to temporary disruptions like a typhoon, while the drop in exports is related to auto production disruptions in Japan.

By region, exports rose to the rest of Asia, including Singapore and Hong Kong, while slipping slightly to the U.S.