Thursday June 21, 2012
Japan exports to US jump, trade deficit widens
TOKYO: Japan's exports rose in May from a year earlier at the fastest pace in almost 1 years due to solid demand from the United States, but the trade deficit widened to the third highest level ever as energy imports surged.
The 10% annual rise in exports in May was more than the median forecast of a 9.3% annual increase and faster than a 7.9% annual jump in April in an encouraging sign that demand for Japanese goods can continue to weather global economic turbulence.
The trade deficit widened more than expected as Japan imported more fossil fuel to offset declining use of nuclear power, but economists said the trade deficit was likely to shrink in coming months as energy prices were now falling.
“Exports to the United States could slow somewhat but are likely to continue to grow as US consumption is holding firm,” said Hiroaki Muto, senior economist at Sumitomo Mitsui Asset Management Co.
“China's efforts to support growth are likely to bear fruit later this year, which will also help Japan's exports. Energy prices are falling, so while there may be some time lag, this will eventually lead to lower imports and a lower trade deficit,” Muto said.
The annual increase in exports was the largest since December 2010, when exports rose 12.9% versus a year earlier.
The deficit in the trade balance in May widened to 907.3 billion yen (US$11.48bil) against a projected deficit of 561.1 billion yen, finance ministry data showed yesterday. In January, Japan recorded its biggest-ever trade deficit of 1.481 trillion yen.
Imports rose 9.3% in May from a year earlier, against the median forecast for a 2.9% annual increase.
Japan's economy grew an annualised 4.7% in the first quarter, and economists expect solid private consumption and rebuilding following last year's disaster on March 11 to sustain growth this year. They forecast the economy will expand 2.3% in the fiscal year ending in March 2013. - Reuters