empty
17.02.2022 08:45 PM
Japan's trade deficit jumps to 8-year high as commodity imports soar

In February, Japan reported its biggest single-month trade deficit in eight years. High energy prices boosted imports and manufacturers struggled with global supply constraints, leading to a drop in car deliveries.

The growing trade deficit highlights the world's third-largest economy's vulnerability to soaring commodity costs and slowing demand from giant neighbour China as the economy there struggles to maintain momentum.

Imports soared 39.6 % year-on-year in January to a record high in yen terms, reaching 8.5231 trillion yen ($73.81 billion), Finance Ministry data showed on Thursday. That was above the median market forecast of 37.1%.

That greatly outstripped a 9.6% rise in exports in the year to January, bringing the trade balance to a deficit of 2.1911 trillion yen, its biggest in a single month since January 2014.

The deficit was much bigger than the median estimate for a 1.607 trillion yen shortfall.

"Exports tend to go down in January due to seasonal factors as factory operation rates are usually low due to New Year holidays," said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.

"So it's easy for the trade balance to go in the red in the month, but the deficit was still large, even when taking that into account," he added.

A big factor in the deficit was a decline in car exports, said Tsunoda, which swung into contraction from an expansion in the previous month.

Manufacturers, including Toyota Motor Corp and Suzuki Motor Corp, were forced to temporarily close some plants after facing supply chain disruptions and pressure due to a record surge in COVID-19 infections at home.

Imports were boosted by a sharp increase in shipments of oil, coal and liquefied natural gas.

By region, exports to China, Japan's largest trading partner, dropped by 5.4% in the 12 months to January, recording the first decline in 19 months, while imports jumped 23.7%, posting the biggest increase in four months.

This was probably partly due to slower exports and advance demand ahead of the week-long Chinese Lunar New Year, which began on the last day of January.

A bigger cause of worry was the slowing momentum of China's massive economy, which is facing weakening consumption and a property downturn, some analysts said.

"China's economic slowdown could weaken exports going forward," said Ryosuke Katagi, market economist at Mizuho Securities.

US-bound shipments, another key market for Japanese goods, grew 11.5% in January, as stronger machinery shipments outweighed a fall in car exports.

Separate government data showed core machinery orders, which serve as a leading indicator of capital spending in the coming six to nine months, were up 3.6% in December from the prior month, better than an expected 1.8% fall.

Manufacturers expected core orders to decline 1.1% in January-March, after a 6.5% gain in the previous quarter.

Japan's economy grew slightly less than expected in the final quarter of 2021 as falling coronavirus cases helped prop up consumption, government data showed on Tuesday, though a record surge in Omicron variant cases and the high raw material prices are clouding the outlook.

Egor Danilov,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Egor Danilov
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Chancy Deposit
    Deposit your account with $3,000 and get $4000 more!
    In July we raffle $4000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST

Recommended Stories

US stocks climb: S&P 500 hits sixth record, chipmakers rally

S&P 500 notched its sixth record. Nasdaq posted six best sessions. Chip stocks surged. PepsiCo and United Airlines climbed. Indices rose: Dow Jones up 0.52%, S&P 500 up 0.54%, Nasdaq

12:47 2025-07-18 UTC+2

US Market News Digest for July 18

The S&P 500, Nasdaq, and Dow Jones closed higher by 0.54%, 0.75%, and 0.52%, respectively, amid strong macroeconomic data. Released figures on retail sales and employment reinforced investor confidence

Ekaterina Kiseleva 12:31 2025-07-18 UTC+2

US indices rush into summer: S&P 500 hits sixth record high and chip stocks soar

The S&P 500 set its sixth record high since June 27. The Nasdaq has posted six best results in the past seven sessions. Chip stocks jumped after TSMC's record quarterly

Thomas Frank 10:43 2025-07-18 UTC+2

US Market News Digest for July 17, 2025

US stock indices closed the day with moderate gains, driven by speculation over Jerome Powell's potential resignation as Chairman of the Federal Reserve, causing short-term volatility in the markets. Investors

Ekaterina Kiseleva 12:36 2025-07-17 UTC+2

Powell's resignation? Markets recover, Nasdaq hits new record

Markets recover from brief sell-off amid Powell's resignation Indices close higher: Dow Jones - 0.53%, S&P 500 - 0.32%, Nasdaq - 0.26% Nasdaq hits fifth all-time high in six sessions

Thomas Frank 11:14 2025-07-17 UTC+2

Nasdaq Storms Highs: Nvidia Soars, Citigroup Closes at 2008 High

Nasdaq Closes at Fourth Record High in Five Sessions Nvidia Surges as China Resume Chip Sales in H1 2020 Citigroup Ends at 2008 Highest After Q2 Profit Beat JP Morgan

Thomas Frank 08:02 2025-07-16 UTC+2

US Market News Digest for July 15

Gilead Sciences stock is showing signs of growth after a strong rebound from the support line, with a projected rise toward the March 10 high of 119.89. Meanwhile, Baidu continues

Ekaterina Kiseleva 14:16 2025-07-15 UTC+2

Bitcoin Breaks $120K, Nasdaq to New Highs: Markets Eager for More Drive

Tuesday Kicks Off Key Economic Data Series and Earnings Season Nasdaq Posts Seventh Record Close Since June 27 Crypto Stocks Jump as Bitcoin Climbs to $120K Waters Merge with Becton

Thomas Frank 10:18 2025-07-15 UTC+2

Markets on edge: Trump targets EU, inflation and China data in focus

Wall Street and European equity indices opened the week in the red, following losses across Asian markets on Monday. Investors are reacting to the latest bout of trade war rhetoric

14:48 2025-07-14 UTC+2

US Market News Digest for July 14

Donald Trump announced 30% tariffs on goods from the EU and Mexico. The initial market reaction was negative, but the S&P 500 partially rebounded thanks to gains in large-cap stocks

Ekaterina Kiseleva 14:36 2025-07-14 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.