Japan logged a trade deficit of JPY 55.3 billion in December 2018, compared with a surplus of JPY 356.2 billion a year earlier and market expectations of a JPY 29.5 billion gap.
Imports rose 1.9 percent from a year earlier to JPY 7.08 trillion in December, missing market expectations of a 3.7 percent growth and far slower than a 12.5 percent increase in November. Purchases of mineral fuels grew 8.7 percent, driven by petroleum (7.2 percent) and LNG (25.7 percent); and imports of others went up 1.1 percent, mainly led by scientific, optical instruments (9.5 percent). In addition, inbound shipments grew for: machinery (6 percent); chemicals (8.2 percent), namely medical products (21.5 percent) and organic chemicals (1.8 percent); manufactured goods (2.7 percent), of which nonferrous metals (0.6 percent), manufactures of metals (6.1 percent), textile yarn, fabrics (5.1 percent) and iron and steel products (1.1 percent); and transport equipment (9.8 percent), namely aircraft (94.4 percent). In contrast, imports of electrical machinery fell 10.8 percent, driven by telephony, telegraphy (-36.8 percent) and semiconductors etc (-2.9 percent).
Among major trading partners, import increases were recorded from the US (23.9 percent), Australia (7.9 percent), the EU (2 percent), in particular the UK (14.6 percent), and the Middle East (9.2 percent), in particular Saudi Arabia (10.4 percent) and the UAE (14.9 percent). By contrast, imports from Asia fell 2.9 percent due to lower purchases from China (-6.4 percent), Taiwan (-2.6 percent), Indonesia (-6.1 percent) and Malaysia (-7.8 percent), while those from South Korea (3.9 percent), Thailand (7.6 percent) and Vietnam (10.7 percent) rose.
Exports declined 3.8 percent to JPY 7.02 trillion, worse than market consensus of a 1.9 percent drop and after a 0.1 percent rise in November. It was the first yearly drop in outbound shipments in three months and the steepest since October 2016 amid weakening global demand and ongoing trade dispute between China and the US. Exports of machinery slumped 6.6 percent, mainly due to semicon machinery etc (-22.4 percent), metalworking machinery (-8.8 percent), pump and centrifuges (-8.7 percent) and parts of computer (-4.8 percent). Sales of electrical machinery fell 7.4 percent, namely semiconductors (-8.2 percent); and those of manufactured goods shrank 5.2 percent, mainly due to iron and steel products (-7.5 percent) and nonferrous metals (-10.2 percent). Exports also decreased for motor vehicles (-0.5 percent) and scientific, optical instruments (-10.3 percent), while sales of chemicals grew 4.2 percent.
Exports fell to Asia (-6.9 percent), in particular to China (-7 percent), South Korea (-11.6 percent), Taiwan (-7.1 percent), Hong Kong (-17.3 percent) and Singapore (-3.3 percent), while those to Thailand rose 4.2 percent. In addition, there were decreases in exports to Australia (-16 percent), Germany (-5 percent) and the Middle East (-4.9 percent), while growth in shipments was seen to the US (1.6 percent) and the UK (14 percent).
Considering 2018 full year, Japan posted a trade deficit of JPY 1.20 trillion, the first trade gap since 2015, as persistent global trade tensions negatively affected Japanese companies' exports. Exports for the year increased 4.1 percent, much slower than a 11.8 percent rise in 2017, with sales growth easing to China (6.8 percent vs 20.5 percent) and the US (2.3 percent vs 6.9 percent). Imports went up 9.7 percent, after a 14.1 percent advance in 2017.
Ministry of Finance | Rida Husna | rida@tradingeconomics.com
1/23/2019 10:23:12 AM