TOKYO–Japan’s trade deficit surged nearly 70 percent to a record 13.75 trillion yen (US$134 billion) in the last fiscal year, the third straight year of deficit, as exports failed to keep pace with surging energy costs.
The Finance Ministry reported Monday that exports in the year that ended March 31 rose 10.8 percent over the year before to 70.8 trillion yen (US$690.5 billion) while imports climbed 17.3 percent to 84.6 trillion yen (US$825 billion).
Preliminary data showed the deficit at 1.45 trillion yen (US$14.1 billion) in March, the 21st straight month of shortfall. The annual rate of growth in exports sank to 1.8 percent in March from a peak of 18.6 percent in October, while the growth rate for imports has remained mostly in the double digits.
Resource-scarce Japan’s costs for energy imports have soared since the March 2011 disaster at the Fukushima Dai-Ichi Nuclear Plant led to the closures of all of its nuclear reactors for safety checks. Prime Minister Shinzo Abe is hoping for restarts of some of those plants to help reduce the burden on the economy.
Japan’s deficit with Middle Eastern countries that provide most of its oil and gas rose 18 percent in fiscal 2013, to 13.7 trillion yen (US$133.6 billion), accounting for the biggest share of its overall deficit.
A weakening of the Japanese yen last year further pushed costs for all imports higher, while exports have not risen as quickly as expected.
Increases in the trade deficit are expected to fall, however, in coming months, Marcel Thieliant of Capital Economics said in a research note.
Imports jumped nearly 12 percent as measured by volume in March, he said, on a surge in purchases ahead of a hike in the sales tax to 8 percent from 5 percent.
“Looking ahead, consumers are likely to rein in spending in the wake of this month’s consumption tax hike, which should reduce import demand,” he said.
Japan’s exports of vehicles, machinery, electronics and manufactured goods have shown solid growth over the past year, with car exports jumping nearly 19 percent. But as many manufacturers shift production to emerging markets in Asia and other regions, its imports of many industrial components are catching up.
Exports to the United States jumped 16 percent, to 13.2 trillion yen (US$128.7 billion), however, against a 17 percent increase in imports to 7.1 trillion yen (US$69.2 billion), leaving a surplus of 6.1 trillion yen (US$59.5 billion).
Japan’s deficit with China jumped nearly 40 percent, to 5.6 trillion yen (US$54.6 billion), though double-digit increases in exports to other Asian countries kept the overall trade balance with the rest of Asia in a surplus.
The deficit with Australia also rose, to 3.5 trillion yen (US$34 billion), while Japan’s deficit with the European Union jumped 70 percent to 719.2 billion yen (US$7 billion).