Japan’s goods trade deficit shrank in April for the first time in 20 months, the government said Wednesday, underscoring that the first consumption tax hike in 17 years weighed on domestic demand and reduced the pace of import growth.
The country’s trade deficit stood at 808.9 billion yen last month, registering the 22nd straight month of red ink but contracting 7.8 percent from a year earlier, the Finance Ministry said in a preliminary report.
The value of imports rose 3.4 percent to 6,878.1 billion yen, up for the 18th consecutive month, with those of liquefied natural gas soaring 11.0 percent. The pace of growth was much smaller than the 18.1 percent increase in March.
The volume of imports fell 1.3 percent in April, suggesting the depreciation of the yen has resulted in Japan paying a higher amount for fewer goods.
Exports climbed for the 14th month in a row, up 5.1 percent to 6,069.2 billion yen, as car shipments were healthy and the yen dropped against the U.S. dollar by 6.7 percent year on year to 102.43 yen in the reporting month, but still failed to surpass imports.
A falling yen usually supports exports by making Japanese products cheaper abroad and boosts the value of overseas revenues in yen terms, though it drives up import prices. Japan depends on imports for more than 90 percent of its energy needs.