BUSINESS

Japan logs record $134B trade deficit in fiscal 2013

Elaine Kurtenbach The Associated Press
Published Sunday, April 20, 2014 9:38PM EDT

A customer looks at products at a bargain sale prior to the tax hike at a supermarket in Shin-Urayasu, near Tokyo on March 27, 2014 (AP Photo/Eugene Hoshiko)

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TOKYO -- Japan's trade deficit surged nearly 70 per cent to a record 13.75 trillion yen ($134 billion) in the last fiscal year as exports failed to keep pace with surging costs for imported oil and gas.

The Finance Ministry reported Monday that exports in the year that ended March 31 rose 10.8 per cent over the year before to 70.8 trillion yen ($690.5 billion) while imports climbed 17.3 per cent to 84.6 trillion yen ($825 billion).

Preliminary data showed the deficit at 1.45 trillion yen ($14.1 billion) in March, the 21st straight month of shortfall.

Resource-scarce Japan's costs for imports of energy 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.

Meanwhile, a weakening of the Japanese yen last year further pushed costs for all imports higher, while exports have risen only modestly.

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 per cent as measured by volume in March on a surge in purchases ahead of a hike in the sales tax to 8 per cent from 5 per cent.

"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 deficit with Middle Eastern countries that provide most of its oil and gas rose 18 per cent in fiscal 2013, to 13.7 trillion yen ($133.6 billion), accounting for the biggest share of its overall deficit.

Exports to the United States jumped 16 per cent, to 13.2 trillion yen ($128.7 billion), however, against a 17 per cent increase in imports to 7.1 trillion yen ($69.2 billion), leaving a surplus of 6.1 trillion yen ($59.5 billion).

Japan's deficit with China jumped nearly 40 per cent, to 5.6 trillion yen ($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 ($34 billion), while Japan's deficit with the European Union jumped 70 per cent to 719.2 billion yen ($7 billion).