Japan Trade Deficit Balloons Due to Energy Imports

Japan’s trade deficit quadrupled in March as export growth slowed and energy imports continued to rise.

A weak Japanese currency, which pushed up the cost of imports, also contributed to the widening gap.

The deficit rose to 1.45 trillion yen ($14bn; £8.4bn), up from 356.9bn yen during the same month a year ago.

Japan’s energy imports have been rising after it shut all its nuclear reactors in the aftermath of the earthquake and tsunami in 2011.

According to the latest trade data, imports of Liquefied Petroleum Gas (LPG) rose more than 8% in March, compared to the same month last year. Meanwhile, imports of Liquefied Natural Gas (LNG) rose nearly 4%.

And Japan is having to pay more for those imports after a series of aggressive policy moves aimed at spurring economic growth – including a huge boost to the country’s money supply – have weakened the yen sharply.

The Japanese currency fell nearly 10% against the US dollar between March 2013 and March this year.

The latest figures show that while LPG imports rose 8.1% in volume during March, the value of those imports rose more than 18%.

Similarly, the volume of LNG imports rose nearly 4%, while the value of those shipments jumped 14%.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza