Japan Trade Deficit Widens in July


Japan's trade deficit widened to JPY 249.6 billion in July 2019 from JPY 227.4 billion in the same month a year earlier and larger than market expectations of a JPY 200 billion gap.

Exports dropped 1.6 percent from a year earlier to JPY 6.64 trillion in July, compared to market consensus of a 2.2 percent decline and June's 6.6 percent fall. It was the eighth straight month of decrease in shipments, amid weakening global demand and the US-China trade dispute. Declines were observed in machinery (-7.3 percent) led by semiconductor machinery (-13.5 percent), pump and centrifuges (-10.9 percent), metalworking machinery (-10.1 percent) and parts of computer (-11.1 percent); electrical machinery (-7.3 percent) due to semiconductors (-7.7 percent), electrical apparatus (-9.1 percent) and measuring (-7 percent), and electrical power machinery (-2.3 percent); manufactured goods (-5.1 percent) such as iron & steel products (-4.2 percent), nonferrous metals (-10.7 percent) and manufactures of metals (-6.4 percent); and chemicals (-0.1 percent) on the back of plastic materials (-2.7 percent) and organic chemicals (-2.2 percent). Conversely, transport equipment exports rose 7.7 percent, mainly due to motor vehicles (9.2 percent).
 
Among main trade partners, exports decreased to China (-9.3 percent), South Korea (-6.9 percent), Taiwan (-8.2 percent), Singapore (-22.3 percent), Thailand (-7.7 percent), and Australia (-15.3 percent). By contrast, exports were up to the US (8.4 percent), the EU (2.2 percent), and the Middle East (17.6 percent).
 
Imports declined 1.2 percent to JPY 6.89 trillion in July, compared to market expectations of a 2.7 percent drop and the previous month's 5.2 percent fall. Purchases of mineral fuels slumped 9.1 percent, mainly due to petroleum (-10 percent), petroleum products (-27.1 percent) and LNG (-6 percent). Also, imports of chemicals fell 6.6 percent on the back of medical products (-7.6 percent) and organic chemicals (-6.2 percent). In addition, arrivals of manufactured goods dropped 0.7 percent, in particular nonferrous metals (-15.3 percent) and iron & steel products (-6.8 percent). In contrast, imports grew for machinery (2.7 percent), transport equipment (2.1 percent), foodstuff (4.5 percent) and raw materials (1.3 percent).
 
Imports fell from South Korea (-8.6 percent), Taiwan (-5.3 percent), the EU (-4.3 percent), and the Middle East (-11.7 percent), of which the United Arab Emirates (-5.3 percent) and Saudi Arabia (-16.6 percent). Conversely, imports rose from China (2.8 percent), Thailand (6.6 percent), Vietnam (17.8 percent), the US (3.5 percent) and Australia (6.2 percent).

Japan Trade Deficit Widens in July


Ministry of Finance, Japan | Chusnul Ch Manan | chusnul@tradingeconomics.com
8/19/2019 8:56:28 AM