TOKYO – Japan reports its exports tumbled 8.4 per cent in January from a year earlier, as slowing Chinese growth pushed its monthly trade deficit to the highest level in nearly five years.
Exports to all of Asia dropped 13 per cent year-on-year, largely due to the 17 per cent plunge in shipments to China, where growth recently has fallen to its slowest pace in three decades.
The politically delicate trade surplus with the United States rose 5 per cent to US$3.3 billion, as exports climbed nearly 7 per cent helped by rising shipments of cars and power generating machinery. But imports of American goods rose by a slightly higher margin on strong growth in purchases of U.S. liquefied gas, coal and grains.
Japan’s total trade deficit expanded by nearly half from a year earlier to 1.4 trillion yen ($12.8 billion), with exports totalling 5.6 trillion yen ($50.3 billion) and imports at 7 trillion yen ($63 billion).
That was the fourth consecutive month of deficits and the biggest such gap since March 2014.
The weakening in trade is unwelcome news with the economy expected to slow in October following a hike in the sales tax to 10 per cent from the current 8 per cent.
The decline in exports in January spanned most major categories of products, from chemicals and machinery to electronics and cars.
Imports of crude oil fell sharply, as measured by value, largely due to lower prices.
The trends suggest a deteriorating outlook for trade as the U.S. and China spar over technology policies and other issues, Marcel Thieliant of Capital Economics said in a commentary.
“Looking ahead, export growth should remain weak. We expect GDP growth in Japan’s main trading partners to soften from 3.4 per cent last year to 2.6 per cent this year,” he said. “What’s more, the recent sharp deterioration in business surveys suggests that external demand may weaken more than we had anticipated.”