The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Tokyo / AFP
Japan fell into a trade deficit in May, the first since January, the finance ministry said on Monday, as
renewed yen strength pressured exports.
Japanese exports fell for all major regions, including the nation’s biggest trading partner China, as concerns linger over a slowdown in the largest Asian economy as well as other emerging markets.
The government of Prime Minister Shinzo Abe has actively attempted to talk down the yen’s strength, with ministers repeatedly suggesting that Tokyo could step into the market to weaken the currency, as they rush to safeguard the fragile economy ahead of a July parliamentary election.
A rising yen dents Japanese exports by making the country’s products more expensive in overseas markets and thus less competitive.
The currency, often seen as a safe haven, has broadly gained in recent months, partially on fears over the state of the global economy and more recently on concerns over a possible British exit from the European Union in a referendum this week.
Expected recovery of oil prices should pull Japan into further deficit in the future, he said.
For May, Japan logged a deficit of 40.72 billion yen ($389 million), compared with a trade surplus of 823.18 billion yen in April, as exports of steel and semiconductors declined, the ministry said. However, it was smaller than the deficit of 215.35 billion yen seen in May 2015.
Exports fell 11.3 percent, marking the eighth straight monthly decline, with the rising yen blamed as “the main reason”, Thieliant said.
The value of steel shipments dropped 24.1 percent, while electronic parts such as semiconductors shrank 20.0 percent, the ministry said.
China-bound exports fell 14.9 percent, led by a dip in optical equipment exports such as lenses, while imports fell 9.7 percent, leaving a trade deficit of 401.1 billion yen, according to the ministry.