- Japan records its largest trade deficit in over eight years, coming in at 2.39 trillion yen (A$25.42 billion)
- It comes as a weaker currency and climbing commodity prices drove imports 48.9 per cent higher in the year to May
- Japan took on larger shipments of oil from United Arab Emirates, and coal and liquefied natural gas from Australia at elevated prices
- During the year to May, exports to Japan’s largest trading partner, China diminished by 0.2 per cent, while shipments to the US grew by 13.6 per cent
Japan has recorded its largest trade deficit in over eight years, coming in at 2.39 trillion yen (A$25.42 billion).
It came as a weaker currency and climbing commodity prices drove imports 48.9 per cent higher in the year to May.
The yen has been weighed down over the past couple of months by rising interest rate differentials, as the Bank of Japan continues to pursue an easy monetary policy stance.
Paired with the Russia-Ukraine war, this depreciation has made importing fuel and raw materials more expensive for the country.
Japan took on larger shipments of oil from United Arab Emirates, and coal and liquefied natural gas from Australia at elevated prices.
Typically, exports pick up when a country’s currency is weaker as buyers start to take advantage of the lower prices. However, analysts expect a time lag to occur before this happens.
During the year to May, exports to Japan’s largest trading partner, China diminished by 0.2 per cent, while shipments to the US grew by 13.6 per cent.