Japan has surprise deficit on strong import growth

TOKYO • Japan had a surprise trade deficit in May, as stronger than expected imports overpowered the best export growth in more than two years.

Exports rose 14.9% from a year earlier (estimate +16%), according to data released by the Ministry of Finance. Part of that was a rebound from weak shipments last year caused by the Kumamoto earthquake in April 2016.

Imports increased 17.8% (estimate +14.5%), the biggest rise in more than three years. The trade deficit was ¥203.4 billion (RM7.69 billion) (estimate +¥43.3 billion).

Japan’s trade has seen a sustained pickup since the start of the year, with five consecutive months of growth in both exports and imports. It’s indicative of an increasingly healthy global

economy and a relatively competitive yen. The Bank of Japan has expressed optimism that private consumption will join exports in helping drive Japan’s economic recovery.

The Finance Ministry said that Japan often experiences deficits in May, as exports slow relative to imports due to a string of national holidays early in the month.

Price and currency changes raised the value of energy imports. The import volume of liquid natural gas rose 13% from a year ago, while the value jumped almost 69%.

Coal and oil were similarly affected. Exports to China, Japan’s largest trading partner, climbed 23.9% from a year earlier. Those to the US rose 11.6%. Shipments to the European Union increased 19.8%. — Bloomberg