| Japan trade deficit soars in May on energy costs |
TOKYO The figures, which showed a 907.3-billion-yen shortfall in May from a year earlier, revealed that Japan had its first monthly trade deficit with the European Union since records started in 1979.
Demand from the continent, a major market for Japanese products, continues to suffer with Tokyo repeatedly warning that the euro zone debt crisis was the biggest risk for Japan’s economy, the world’s third largest.
Tokyo’s trade deficit with the EU came to 11.1 billion yen in May, reversing a year-earlier surplus of 25.6 billion as exports of microchips and other electronic parts tumbled.
There was, however, contrasting news in the form of exports overall rising 10 per cent to 5.23 trillion yen as shipments of automobiles and auto parts soared, mainly driven by demand in the US.
“Europe’s debt problem is affecting international trade,” said Daiwa Institute of Research economist Satoshi Osanai, noting Europe-bound exports from the United States and China were also slowing.
“If the European situation worsens, trade figures would worsen further. We have to watch the European problem closely.”
Japan’s overall May trade deficit was a record for the month and 5.4 per cent higher than the 860.7-billion-yen deficit in May 2011.
It was also well above the 520-billion-yen deficit expected by economists.
Overall, imports jumped 9.3 per cent to 6.14-trillion yen ($77.8 billion) from a year earlier, largely due to rising purchases of foreign oil and gas.
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