Japan sank into trade deficit last month 

TOKYO

Japan suffered a trade deficit last month as exports sank for the first time in more than two years, dragged down by a slowdown overseas.

Japan’s trade deficit totaled 78.7 billion yen ($539 million), the Finance Ministry said yesterday, the first trade deficit for the world’s third largest economy in two months.

Exports shrank most markedly for the rest of Asia, including China, Singapore and Taiwan, declining 0.3 percent from the same month the previous year to 8.73 trillion yen ($60 billion).

Exports recovered in autos and auto parts, as the social restrictions related to the COVID-19 pandemic, which had crimped production, eased gradually.

But that was not enough to offset the drop in exports in computers, computer chips, machinery and other manufactured goods.

Imports fell in various sectors, including food, machinery and energy, slipping 13.5 percent from the previous year to 8.8 trillion yen ($60 billion). 

Imports to Japan dipped not only from Asia but many other nations, including the U.S., Mexico, the countries in the Middle East, as well as Russia.

Import costs ballooned last year on the back of surging fuel costs, as well as the weakening Japanese yen. 

The yen continues to be weak, trading at about 146 yen to the U.S. dollar lately. That likely means worries will persist about the strength of Japan’s economic recovery.

The relatively pessimistic read on Japan’s trade follows a bit of brighter news that came earlier this week, in which the government said that Japan’s economy grew at an annual pace of 6 percent in April-June, marking the third straight quarter of growth as exports and inbound tourism recovered.