Japan’s trade deficit reaches record level

THE JAPANESE trade deficit is now larger than ever, with figures released this weekend showing the complete reversal of the country’s once-reliable surpluses.

Japan has not recorded a trade surplus in any month for nearly two years, and at ¥1.45 trillion (£8.41bn) in March, the deficit is now more than four times as large as last March’s ¥362.4bn. Imports from China alone have risen by 27 per cent in the last year.

Despite the policy of monetary easing introduced by Prime Minister Shinzo Abe and central bank governor Haruhiko Kuroda, imports have grown at a much faster pace than exports, contrary to some analyst expectations.

Imports rose by an impressive 18.1 per cent in March, compared to the same month last year, outstripping exports exports grew by only 1.8 per cent, much more slowly than forecast.

Economists from Societe Generale have previously predicted that the country’s trade balance should moderate after this month, with a new higher consumption tax weighing against domestic demand and holding imports down. At the same time, further recovery in the United States could drive export demand.