Japan trade hit by Europe crisis, China tensions
Monday, October 22, 2012
TOKYO (AP) — Japan's trade deficit widened in September as exports plunged 10.3 percent from a year earlier, weighed down by Europe's debt crisis and a surge in antagonisms with China that have damaged close economic ties.
The deficit for the month was 558.6 billion yen ($7.2 billion), the Finance Ministry said Monday, higher than the forecasts of many analysts and bigger than a deficit of about $3.7 billion a year earlier. The deficit in August was $9.6 billion.
The trade figures came as Japan's central bank governor, Masaaki Shirakawa, warned that the risk of shocks to the financial system from the debt crisis in Europe remains high, while slowing global growth is hitting manufacturing and exports.
"We must remain fully vigilant toward market developments," Shirakawa told a quarterly meeting of the bank's regional managers.
September's exports totaled 5.4 trillion yen ($68.7 billion). Imports rose 4 percent from a year earlier to 5.9 trillion yen ($75.9 billion), inflated by additional imports of oil and other fuels for power generation as most nuclear reactors remain offline in the aftermath of last year's Fukushima nuclear disaster.
So far, Japan's trade deficit for 2012, according to the ministry's provisional figures, is about 4.73 trillion yen ($60.6 billion).
The ministry figures show exports to all regions falling, apart from a meager 0.4 percent year-on-year gain in shipments to North America. Exports to crisis-stricken Europe plummeted 26 percent.
A territorial dispute with China that sparked anti-Japanese riots in September took a heavy toll, with exports to China sinking 14 percent from a year earlier to 953.4 billion yen ($12.2 billion). Imports from China climbed 3.8 percent to 1.28 trillion yen ($16.4 billion).
The rise in antagonisms over disputed islands in the East China Sea has been especially hard on the auto industry. Auto exports fell 15 percent in September from the year before
The strong Japanese yen has hurt the country's export competitiveness, while demand has evaporated as growth slowed in most regions. Exports of consumer electronics, a mainstay, fell by double-digit figures from a year earlier.
Resource-scarce Japan is almost entirely dependent on imported fuel, and it has long relied on robust exports of high-value consumer goods and industrial products such as machine tools to help counter the cost of importing its energy needs.
With most of the country's nuclear plants shut down, manufacturers and utilities have increased their reliance on traditional energy sources such as oil and gas, while stepping up conservation and investments in renewable energy.
Boosted partly by higher prices, imports of fuels jumped 18 percent in September from a year earlier to 2.15 trillion yen ($27.6 billion), accounting for more than a third of Japan's total imports.
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