Japan's trade deficit for first half declines as exports recover

Japan has reported it logged a trade surplus in June, the first in three months, highlighting a recovery in exports

Japan Trade (Copyright 2022 The Associated Press. All rights reserved.)

Japan posted a trade surplus in June, the first in three months, highlighting a recovery in exports, government data showed Thursday.

For the first six months of this year, Japan’s trade deficit declined by more than half from the same period last year, to 3.23 trillion yen ($21 billion), according to Finance Ministry data.

The yen’s weakness against the U.S. dollar has helped boost Japan’s exports in recent months. The trade surplus in June grew five-fold from a year earlier to 224 billion yen, or $1.4 billion, on rising exports of vehicles and computer chips.

The weak yen works as a negative for Japan’s imports, especially amid inflationary trends and rising energy costs. Resource-poor Japan imports almost all its energy.

Japan has logged trade deficits for six straight fiscal half-years, starting with the final half of 2021, mainly because of the weak yen and rising global prices. Japan's fiscal year runs from April to March.

For the month of June, imports rose 3% to 8.98 trillion yen ($58 billion), while exports rose 5% to 9.2 trillion yen ($59 billion).

In the first six months of the year, imports rose 0.8% to 54.7 trillion yen ($350 billion), while exports gained nearly 9% to 51.5 trillion yen ($330 billion).

A report by economists at SMBC Nikko Securities, including Koya Miyamae, projects Japan’s trade deficit will continue to decline. Exports to the U.S. and Asia rose, those to Europe are lagging, they said.

The U.S. dollar has been rising steading this year, hitting 160-yen levels in recent weeks. The dollar was trading at about 156 yen Thursday. Although a weak yen erodes Japan’s purchasing power, it boosts the value of overseas earnings when converted into yen.

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Yuri Kageyama is on X: https://twitter.com/yurikageyama