Japan has a deficit of 2 billion USD due to a sharp decrease in exports to China.

Japan recorded a trade deficit of 294.3 billion yen ($2 billion) in September 2024, mainly due to a decline in exports to major markets such as China, while imports continued to rise, according to a report released by the Japanese Ministry of Finance on Thursday.

Japan's trade deficit widened to 3.1 trillion yen (about $21 billion) in the first half of the fiscal year, preliminary data showed, reflecting an imbalance between imports and exports amid a weaker yen and rising energy import costs.

Japan's trade deficit hit $2 billion in September due to a sharp drop in exports to China, posing many challenges for the economy - (Illustration photo)

Japan's exports fell 1.7% in September from a year earlier, marking the first decline in 10 months, while imports rose 2.1%, largely due to a weaker yen, which increased the value of imported goods.

While exports to other Asian countries are on an upward trend, the decline in exports to China and some other major markets raises questions about global demand, especially in the context of a slowing global economy.

Some economists say the slowdown may be a temporary blip from factors such as the recent typhoon, but Japan, which relies heavily on exports, still faces longer-term concerns about slowing global demand.

The US dollar has recently hovered around 149 yen to the dollar, not much different from the same period last year, but higher than the level of around 120 yen two years ago. The weak yen has pushed up import costs, especially for energy products, as prices continue to climb.

However, in the first half of fiscal 2024, Japan's exports still recorded a 6.6% increase to 53.55 trillion yen (358 billion USD), thanks to strong demand for computer chips and some other high-tech products. On the contrary, imports increased 7% to 56.66 trillion yen (379 billion USD), mainly due to Japanese consumers and businesses increasing purchases of products from the United States.

The report also said that in the April-September period, Japan had a trade surplus of nearly 4.3 trillion yen ($29 billion) with the United States, but recorded a deficit of 3.00 trillion yen ($20 billion) with China, reflecting Japan's dependence on both major markets and the challenges its economy faces in a volatile global environment.

With complicated developments in the international market, Japan is expected to continue to face difficulties in maintaining trade balance and ensuring economic growth momentum.

https://apnews.com/article/japan-trade-energy-deficit-currency-583416dd5f2ded1e1ca9667149342683

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