Japan Trade Deficit Widens as Trade Tensions Escalate

Japan posted a trade deficit of JPY 967 billion in May 2019 compared with a JPY 577 billion shortfall in the same month a year earlier and market expectations of a JPY 979 billion gap. Exports declined for a sixth straight month while imports edged down after climbing in April.

Exports fell 7.8% from a year earlier to JPY 5.84 trillion, compared to market consensus of a 7.7% drop and after a after a 2.4% fall in April. It was the sixth straight month of declines in shipments, amid weakening global demand and the US-China trade dispute. Shipments were mainly dragged down by machinery (20 percent of total exports), down 13.1 percent after falling 4.1 percent in the previous month, as semicon machinery plummeted 30.4 percent. Also, electrical machinery (17 percent of total exports) plunged 9.9 percent after a 4.6 percent decline, as telephony dropped 22.6 percent and audio & visual apparatus shrank 21.8 percent.

Among main trade partners, exports fell to China (-9.7 percent), Korea (-13.3 percent), Australia (-17.2 percent), and Brazil (-30 percent). In contrast, sales to the United States climbed 3.3 percent. 

Imports declined 1.5 year-on-year to JPY 6.80 trillion, compared to market expectations of a 0.2 percent increase and following a 6.4 percent rise in the previous month. Purchases were mainly dragged by a 10.5 percent drop in chemicals. Imports also contracted for: foodstuff (-3.9 percent), raw materials (-3.1 percent), manufactured goods (-2.2 percent), and mineral fuels (-1.6 percent). In contrast purchases of transport equipment jumped 10.2 percent, namely motor vehicles (14.3 percent) and aircraft (25.4 percent).

Among main trade partners, imports from the US dropped 1.6 percent and from China 0.9 percent, whereas purchases from Western Europe jumped 7.0 percent.

Japan Trade Deficit Widens as Trade Tensions Escalate

Ministry of Finance l Mario | mario@tradingeconomics.com
6/19/2019 10:27:45 AM