A worker walks past stacked containers at a shipping terminal in Yokohama City, Japan. (Bloomberg)
TOKYO (AFP) ― Japan’s trade deficit narrowed in May as imports turned down for the first time in a year and a half, data showed Wednesday, but weaker shipments abroad helped keep the trade balance in the red.
The figures ― which suggested the world’s number three economy was slowing ― reflected a fall-off in spending after sales taxes rose in April, a move seen as crucial to paying down a huge national debt but one that threatened to stall the nation’s budding economic recovery.
The trade deficit has ballooned since the 2011 Fukushima atomic crisis forced the shutdown of nuclear reactors and a shift to pricey fossil-fuel imports to plug the energy gap. Nuclear once supplied more than a quarter of Japan’s power.
“The weaker yen had contributed to the widening of the trade deficit last year, as it pushed up import prices by more than it raised the value of exports,” said Marcel Thieliant of Capital Economics.
“However, the boost to trade values from the weak yen is now clearly over.”
On Wednesday, the finance ministry said Japan’s May trade deficit narrowed 8.3 percent from a year ago to 909 billion yen ($8.9 billion), marking the 23rd consecutive monthly shortfall.
Imports were down 3.6 percent to 6.5 trillion yen, the first on-year drop in 19 months as crude oil shipments fell by nearly 20 percent in volume terms.
Domestic demand for gasoline and other products jumped in the months ahead of the consumption tax rising to 8.0 percent from 5.0 percent, as millions of shoppers dashed to stores before prices went up.
May exports fell 2.7 percent to 5.6 trillion yen, the first downturn in over a year as demand for refined fuel and vehicles fell overseas.