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Japan logs goods trade deficit for 2nd straight month in Aug.

  • September 18, 2019
  • , Kyodo News , 1:14 p.m.
  • English Press

TOKYO — Japan posted a goods trade deficit for the second consecutive month in August, affected by sluggish exports of semiconductor manufacturing equipment to China on the back of Beijing’s trade tensions with Washington, government data showed Wednesday.


The trade deficit stood at 136.3 billion yen ($1.26 billion), following a revised 250.7 billion yen deficit in July, according to a preliminary report by the Finance Ministry.


In the reporting month, exports fell 8.2 percent from a year earlier to 6.14 trillion yen, down for the ninth straight month.


Imports dropped 12.0 percent to 6.28 trillion yen, falling for the fourth consecutive month, as shipments of crude oil and other energy commodities to Japan decreased both in volume and value.


By region, exports to China, including devices used for the production of liquid crystal displays and auto parts, plunged 12.1 percent from a year earlier, marking the sixth consecutive monthly contraction, which a ministry official attributed to a slowdown in the world’s second-largest economy.


Meanwhile, imports from China, such as mobile phones and auto engines, were also down 8.5 percent, leaving Japan with a deficit of 216.8 billion yen against its biggest trading partner.


Against the whole of Asia, including China and South Korea, Japan’s trade surplus shrank 16.6 percent to 443.4 billion yen, hit by decreasing exports of steel products to Malaysia.


Japan’s exports to South Korea dropped 9.4 percent to 422.6 billion yen, amid a trade dispute that has been escalating between the two neighbors since July.


Yutaro Suzuki, economist at the Daiwa Institute of Research, said South Korean demand for Japanese food and automobiles was weak in the wake of the dispute, which has spurred a consumer boycott of Japanese goods.


But exports of electronic equipment, including semiconductors, increased apparently due to last-minute buying by South Korean companies ahead of Japan’s implementation of tougher trade rules.


In late August, Japan revoked South Korea’s status as a trusted trade partner, deleting it from Tokyo’s “white list” of countries that face minimum trade restrictions for goods such as electronic components that can be diverted for military use.


Japan, the world’s third-largest economy, registered a trade surplus of 472.0 billion yen with the United States, but its exports of vehicles dropped 13.0 percent from a year ago.


The ministry official explained that auto exports tend to be sluggish in August as manufacturers suspend factory operations during summer holidays in Japan.


With the European Union, Japan saw a trade deficit for the second consecutive month, booking 78.8 billion yen in red ink in August, partly because of declining exports of medical products to Britain.


Looking ahead, Suzuki said, “It is difficult to project (Japan’s) exports will expand amid a slowdown in the global economy.”


The figures were compiled on a customs-cleared basis.

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