Japan Posts Huge Trade Deficit in August, Despite Rise in Exports

Posted September 21st, 2011 at 2:26 am (UTC-5)
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Japan's trade deficit swelled to more than $10 billion in August as the country continues to feel the effects of the March 11 earthquake and tsunami.

The trade ministry said Wednesday that exports were 2.8 percent higher than in August last year. That was the first year-to-year increase since March, but well below the 8.0 percent figure predicted by economists.

Imports, meanwhile, surged by more than 19 percent due to higher oil prices and strong demand for liquefied natural gas. Purchases of LNG soared to make up for lost power generation at the nation's nuclear power plants, most of which have been closed since the disaster at the Fukushima nuclear plant.

Automobile exports were up by 5.3 percent as the manufacturing sector restores supply chains that were disrupted by the earthquake.

But manufacturers are now facing pressure from a surge in the value of the yen, which makes their products more expensive in overseas markets. Shipments of electronics parts plunged 16.4 percent.

Exports to Asia rose just 0.4 percent in August, with exports to China rising 2.4 percent. The country's exports to the United States climbed 3.5 percent, while shipments to the European Union climbed 6.0 percent.