Home Daily Blitz Japan Has Surprise Trade Deficit in May on Energy Import Jump

Japan Has Surprise Trade Deficit in May on Energy Import Jump


The following is an excerpt from Connor Cislo | June 18, 2017 | Bloomberg.com |

apan’s trade balance unexpectedly fell into deficit in May on a strong rise in energy imports, even as overall exports and shipments to China, the U.S. and Europe all rose by double digits.
Key Takeaways

Japan’s trade has seen a sustained pickup since the start of the year, with five consecutive months of growth in both exports and imports. It’s indicative of an increasingly healthy global economy and a relatively competitive yen. The Bank of Japan has expressed optimism that private consumption will join exports in helping drive Japan’s economic recovery.

Economist Views

The large year-over-year increase in exports is in part due to the Kumamoto earthquake, which shut down production lines and crimped exports, Takashi Miwa, chief economist at Nomura Securities Co. Ltd., wrote in a note before the data was released.

"There are concerns in relation to Asian demand," wrote Yuichiro Nagai and Yukito Funakubo of Barclays Securities Japan in a note before the release. "However, we do not expect an abrupt slowdown in exports."

Nagai and Funakubo expect exports to slow in the second quarter, but pick up again from the third quarter.

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