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Japan logs goods deficit in February for seventh straight month

TOKYO (Kyodo) — Japan posted a goods trade deficit of 668.3 billion yen ($5.6 billion) in February, logging red ink for the seventh consecutive month as the cost of energy imports continued to grow, the Finance Ministry said Wednesday.

Imports grew 34% from a year earlier to 7.9 trillion yen, rising for the 13th straight month, the ministry said in a preliminary report, as purchases of crude oil, especially from the United Arab Emirates and liquefied natural gas from Australia, were more expensive.

Crude oil imports jumped 93.2% to 808.6 billion yen, up for the 11th straight month, also on the back of the yen’s depreciation against major currencies and Russia’s invasion of Ukraine.

But a ministry official said it was difficult to tell how much the preliminary report reflected the impact of the invasion on import costs, as Russia’s assault began on Feb. 24.

“We will look closely at the impact of the Ukraine crisis on the Japanese economy,” the official added.

Exports rose 19.1% to 7.2 trillion yen, up for the 12th straight month, driven by robust demand for light oil in Australia. Iron and steel product shipments to South Korea and auto exports to the U.S. also contributed to the increase.

Although exports expanded on a year-on-year basis, Daichi Kawabata, economist at Mizuho Research & Technologies, said they lacked growth momentum, citing a decrease from the previous month.

Seasonally adjusted exports sagged 0.5% from January while imports climbed 2.7%, according to the ministry.

“Auto exports remain sluggish due to continued semiconductor shortages since last year while a resurgence of coronavirus cases this year (in Japan) forced some manufacturers to suspend their factories,” said Kawabata. “High raw material costs were a further blow to the trade balance.”

He also said crude oil prices are expected to keep climbing or stay at a high level amid fallout from the Ukraine crisis.

In February, auto exports increased 8.3% from a year earlier, following a 1% decline in January and a 17.6 advance in December.

Japanese exports to Russia increased 30.9% while imports jumped 107%.

The impact from economic sanctions on Russia is expected to be felt in trade data in March and later. Japan has joined the U.S. and its allies in taking measures against Moscow, such as export controls.

With the U.S., Japan’s exports increased 16% to 1.3 trillion yen on more shipments of cars and kerosene, according to the data. Imports soared 38.9% to 864.7 billion yen partly due to increases in the value of purchases of corn and other grains.

Japanese exports to China, its biggest trading partner, grew 25.8% to 1.5 trillion yen on brisk demand for semiconductor-making equipment. Imports gained 5.8% to 1.5 trillion yen on increased purchases of chip parts.

All figures were compiled on a customs-cleared basis.



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