Bloomberg News
Tokyo — Japan posted its first trade deficit in four years in January, without adjusting for seasonal variations, as slowing growth in Asia and the United States cut into sales of exporters from Nippon Steel Corp. to Fujitsu Ltd.
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| Business activity has slowed for Japanese companies such as Ishikawajima shipyard in Tokyo.
Bloomberg News Service |
The trade balance turned to a 95.3 billion yen ($823 million) deficit last month from an 816.1 billion yen surplus in December, the Ministry of Finance said. In seasonally adjusted terms, the surplus narrowed to 453.4 billion yen, the smallest in almost four years.
The trade surplus has been shrinking as Nippon Steel, NEC Corp., Matsushita Electric Industrial Co. and other exporters say sales to the United States and Asia are slowing. Companies are curtailing investment as orders dry up, threatening to stymie a recovery in an economy that shrank 0.6 percent in the third quarter last year.
"The export figures were really bad," said Tomoko Fujii, a senior economist at Nikko Salomon Smith Barney Ltd. "And high-tech companies are cutting their earnings forecasts. We can no longer draw a recovery scenario for Japan."
The export slowdown comes amid signs that domestic demand is waning. Spending on services rose 0.3 percent in the fourth quarter of last year, down from a 0.5 percent gain in the third quarter, a separate government report showed.
That points "to even slower growth in the fourth quarter and then on," said Fujii.
Overall, exports fell 5.2 percent from a month earlier. From a year ago, exports increased 3.1 percent, the smallest gain in six months, today’s report showed. Waning export demand pushed the trade balance with Asia into deficit for the first time in three years.
By volume, exports fell 5.1 percent from a year earlier, the first decline in 20 months, as exports to Asia, the United States and the European Union fell.
Exports are usually slower in January because of New Year’s national holidays that fall on the first three days of the month.
Shipments to the United States dropped 12 percent, the fifth straight fall, and the biggest since April 1996. The 8.2 percent decline in exports to the EU was the largest since May 1999. Exports to Asia fell 1.2 percent, the first decline since March 1999.
The United States is growing at its slowest in five years. That’s sapping demand from other Asian countries, which buy parts and raw materials from Japan used in products destined for U.S. markets. About 40 percent of Japan’s exports are shipped to Asian nations, while 30 percent of exports go to the United States.
Meantime, Japan’s import bill last year was the second largest on record, bloated by higher oil prices and companies importing materials used to produce more goods. More recently, a cheaper yen has made imports more expensive.
Imports, which fell 5.7 percent in January from December, were still up 24.3 percent from a year earlier, the report showed. The finance ministry calculated the surplus using an average exchange rate of 115.19 yen to the dollar in January, down 9.9 percent from a year earlier. The yen recently traded at 115.45 to the dollar.
Waning overseas demand has prompted manufacturers in Japan to scale back production, which has been cited by the government and the Bank of Japan as the main reason for downgrading their economic assessments in recent months.
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