Oct 22, 2014 12:36 AM
Japan's exports up in September, deficit persists
The Associated Press
TOKYO (AP) Japan's trade deficit edged higher in September though exports rose more than expected as the yen weakened to a near six-year low, the Finance Ministry said Wednesday.
Exports jumped 6.9 percent from a year earlier in September to 6.38 trillion yen ($59.6 billion) while imports rose 6.2 percent to 7.34 trillion yen ($68.6 billion). That left a deficit of 958.3 billion yen ($8.96 billion), compared to a shortfall of 943.2 billion yen a year earlier.
The September figures took Japan's trade deficit in the first half of the fiscal year to 5.53 trillion yen ($50.7 billion), up 8.6 percent from a year earlier.
The dollar rose to nearly 110 yen in September, potentially helping to make Japanese products cheaper abroad. On Wednesday, the dollar was trading near 107 yen.
Japan's economic recovery has slowed in recent months, partly due to the impact of a 3 percentage point sales tax increase in April, which dented consumer demand. The weaker yen has helped many Japanese manufacturers, but not all, because it also increases costs for imports of fuel, raw materials and components.
Other countries that trade with Japan have tolerated the sharp depreciation in the yen since Prime Minister Shinzo Abe took office in late 2012, for the sake of reviving growth in the world's third-largest economy. But Japan's willingness to open its own markets to more imports remains a sore point, as U.S. Commerce Secretary Penny Pritzker, who is visiting Japan with a delegation of American business executives, said Tuesday.
The U.S. Treasury Department's undersecretary for international affairs, Nathan Sheets, is also visiting Tokyo this week for talks on various issues, including Japan's growth strategy.
Sheets, who worked as an economist for Citibank before taking on posts at the Treasury Department, has written commentaries emphasizing that a weak yen would provide only a slight and temporary boost to Japan's growth. Sustainable growth requires longer-term structural reforms. Abe has promised to push for such changes, but so far has made scant progress.
Economists expect the U.S. economic recovery to give a long-awaited boost to Japan's exports, which rose 4.4 percent in September from a year earlier to 1.56 trillion yen ($14.6 billion). That made the U.S. Japan's biggest single export market, followed by China. But the strongest growth in September was in trade with China and other Asian countries and with the Middle East.
Machinery and car exports both rose in September, while demand for food and fuel pushed imports higher.
"We still have to wait for recovery of demand from the U.S. economy in order to confirm steady recovery of exports," Credit Agricole economist Michael Carey said in a commentary Wednesday.
Despite a weakening of the yen in the past two years, the trade deficit has remained a drag on growth, thanks partly to imports of oil and gas to compensate for the country's loss of generating capacity after reactors were idled following the March 2011 disaster at the Fukushima Dai-Ichi nuclear plant.
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