JAPAN recorded its deepest ever trade deficit in January, despite a sharp weakening in the yen due to a raft of monetary stimulus.
Exports climbed for the first time in eight months, helped by a 16 per cent slide in the yen, versus the dollar, since November last year. But this 6.4 per cent annual rise was more than erased by a 7.3 per cent surge in imports, bringing them to ¥6.43 trillion (£44.9bn).
This left a balance of minus ¥1.63 trillion, up ten per cent on last January, and the highest gap ever.
The record deficit came despite Prime Minister Shinzo Abe’s aggressive fiscal and monetary policy to weaken the yen, indicating a rise in exports on its own was not enough to turn things around.
“Trade deficits could continue for much of this year, if not into next year,” said Norio Miyagawa, senior economist at Mizuho Securities Research & Consulting.
“This shows that on a net basis money is leaving the country. We need to turn this around by increasing our earnings power from exports. A weak yen will help, but it won’t solve all our problems.”