Japan's trade deficit widens in January as exports to China decline



Japan's trade deficit for January increased over the previous year, with exports to China recording their largest decline in three years, official statistics released on Wednesday revealed.

Japan recorded a trade deficit for the month of 1 400 billion yen ($ 12.8 billion), 49.2% more than a year ago, the Ministry of Finance said.

Exports fell for the second month in a row, as exports to China fell 17.4%, the largest drop since January 2016, as shipments of plastics and electronic devices fell sharply.

The data comes from a global economic slowdown and increasing trade tensions. Japan exports a range of products, including electronics and industrial equipment, to China, which is currently in a stalemate with Washington.

The latest trade data from Tokyo "reflect a slowdown in the Chinese economy," said Takeshi Minami, chief economist at the Norinchukin Research Institute.

Japan often has a deficit in January, as the Lunar New Year holiday period in China is reflected in a drop in demand.

But last month, "exports of products such as chip making devices that are unrelated to Chinese New Year celebrations have dropped, showing that Chinese equipment and factory spending is falling" , said Minami to AFP.

The slowdown in China will also put pressure on Europe as well as other neighboring Asian countries, he said.

"The slowdown in the global economy will weigh more heavily on Japanese exports," he said.

Japan's politically sensitive surplus with the United States recorded its first increase in seven months, rising 5.1%, largely due to higher car exports.

With the European Union, Japan recorded a deficit of 96 billion yen, down 4.9% from the previous year. Both parties hope to see trade grow in the future after a massive trade deal comes into effect this month, covering savings of one third of global GDP.

© 2019 AFP


Source link