Japan Faces 51 Trillion Yen Trade Deficit, Yen Value Plummets

[Image source=Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] Japan's trade balance recorded its largest deficit in seven years.

On the 20th, Japan's Ministry of Finance announced that the trade balance for the 2021 fiscal year (April 2020 to March 2021) showed a deficit of 5.3748 trillion yen (approximately 51.6115 trillion won).

This marks the first time in two years that Japan's trade balance has turned to a deficit since the 2019 fiscal year (1.2936 trillion yen). The deficit is the largest since the 2014 fiscal year (9.1277 trillion yen).

Exports and imports both reached record highs at 85.8785 trillion yen and 91.2534 trillion yen, respectively. Exports showed strong performance in steel (62.7%), semiconductor manufacturing equipment (33.9%), and automobiles (12.8%). Imports surged significantly due to soaring energy prices, with coal (113.4%), crude oil (97.6%), and liquefied natural gas (58.8%) increasing sharply.

The monthly trade balance for March 2022 recorded a deficit of 412.4 billion yen. This marks eight consecutive months of deficits since August last year. Major foreign media reported that "Japan's March trade deficit is more than four times the market forecast."

Exports increased by 14.7% compared to the same period last year to 8.4609 trillion yen, while imports surged 31.2% to 8.8733 trillion yen.

Due to the large trade deficit, the value of the yen plummeted. In the Tokyo foreign exchange market, the yen-dollar exchange rate rose to 129.38 yen, reaching the highest level in 20 years since April 2002.

Nihon Keizai Shimbun reported, "There are forecasts in the market that it will exceed 130 yen," adding, "It is uncertain how far the depreciation of the yen will proceed."

This content was produced with the assistance of AI translation services.