Japan's Trade Deficit Continues for 10 Months... May Imports Surpass 9 Trillion Yen 'First Time Ever'

Rising Energy Import Costs Due to War Aftermath + Weak Yen Impact

[Image source=AFP Yonhap News]

[Asia Economy Reporter Byunghee Park] Japan's trade balance recorded a deficit for 10 consecutive months. This was due to the continued weakness of the yen and a sharp increase in energy import costs.

According to Bloomberg News, the Japanese Ministry of Finance announced that the trade deficit for May was 2.38 trillion yen. The May trade deficit was the second largest ever, following the record 2.7951 trillion yen deficit in January 2014. The 10-month consecutive deficit is the longest streak since 2015.

Imports in May surged 48.9% year-on-year to 9.6367 trillion yen. This is the first time Japan's monthly import value exceeded 9 trillion yen. Bloomberg reported that the 48.9% import growth rate is the highest in over 40 years. Analysts surveyed by Bloomberg had expected a 44% increase in imports.

On the other hand, exports in May rose 15.8% year-on-year to 7.252 trillion yen. The export growth rate was close to analysts' expectations.

Maruyama Yoshimasa, Chief Economist at SMBC Nikko Securities, explained, "The biggest cause of the trade deficit is the increased energy import costs in dollar terms due to the Ukraine war, followed by the weakness of the yen."

In the May trade statistics, the dollar-yen exchange rate averaged 129.17 yen per dollar. This represents an 18.7% decline in the yen's value against the dollar compared to one year ago.

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