Japan logged a 2.16 trillion yen (15.47 billion U.S. dollars) trade deficit in October, a record for the month and marking a 15th straight month of red ink, as prices for energy and raw material imports soared amid the yen's steep decline, the government said.
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According to the Finance Ministry, the country's imports rocketed 53.5 percent from a year earlier to 11.16 trillion yen (79.98 billion U.S. dollars), the highest since record keeping began, pushed up by rising costs for crude oil, liquefied natural gas and coal.
Japan's imports, meanwhile, climbed 25.3 percent to 9.00 trillion yen (64.50 billion U.S. dollars), the ministry added, on solid overseas demand for automobiles and electronic parts.
Japan's deficit with China, its largest trading partner, stood at 671.35 billion yen (4.81 billion U.S. dollars), the ministry's data showed, with imports of computers and smartphones seeing an uptick.
In the same period, Japan logged a trade surplus of 720.36 billion yen (5.16 billion U.S. dollars) with the United States, with exports increasing 36.5 percent to 1.78 trillion yen (12.75 billion U.S. dollars), while imports totaled 1.06 trillion yen (7.59 billion U.S. dollars), climbing 47.1 percent.
With the rest of Asia including China, Japan booked a trade deficit of 152.97 billion yen (1.09 billion U.S. dollars), and booked a deficit of 214.11 billion yen (1.53 billion U.S. dollars) with the European Union, the ministry's data showed.
"The weaker yen boosted imports, and exports are falling in terms of volume. Japan's trade balance will likely remain deeply in the red for the coming months, though the deficit may become smaller," Kota Suzuki, an economist at Daiwa Securities Group Inc., was quoted as saying.
Economists here also noted that the yen slipping to decades lows against the U.S. dollar has hammered the country's fiscal health, with Japan's current account surplus in the first six months of fiscal 2022 falling more than 50 percent compared to a year earlier.
Japan, the world's third-largest economy, could slip into a recession looking ahead, they added, following the nation's economy unexpectedly shrinking for the first time in four quarters in the July-September period, according to government data released Tuesday.
Japan's Cabinet Office said the economy here contracted an annualized 1.2 percent in the recording period, with the shock decline compared to median economists' expectations for growth of 1.1 percent on the heels of a revised 4.6 percent expansion logged in the second quarter.
This contraction was in part due to the yen tumbling to 32-year lows against the U.S. dollar further inflating soaring import and living costs, the data showed, as a result of a widening interest rate gap between the Bank of Japan (BOJ) and other central banks, including the U.S. Federal Reserve, local economists said.
The BOJ has maintained its ultra-easy monetary policy, believing the global inflation crisis to be transitory. This is in stark contrast to hefty rate hikes being implemented by the BOJ's global peers in a bid to tame rampant, global inflation, they highlighted.
The prevailing view among leading economists here is that in the first half of 2023, Japan will slip into a mild recession amid a global slowdown that will further hit the resource-poor country's sluggish exports. ■