JAPAN slipped into a current account deficit in July, as exports dwindled and imports swelled, according to ministry of finance data released yesterday.
Exports slipped 8.1 per cent over the year, to hit 5.3 trillion yen (£42.4bn), while imports climbed 2.1 per cent, reaching 5.8 trillion yen – leaving a deficit of 517bn yen.
Japan’s deficit with top trading partner China grew 235.2 per cent, and the Asian giant moved into deficit with western Europe as its exports there collapsed 28.4 per cent over the year.
The fall was driven by diving sales of electrical machinery, especially semiconductors – while car sales proved a counterpoint by increasing slightly.
“Europe’s debt crisis is the first factor to pull down exports, and the pace of decline is striking. This is comparable to the post-Lehman situation,” said Masayuki Kichikawa, chief Japanese economist at Merrill Lynch in Tokyo.