Japan trade deficit grows as oil prices surge, yen drops

TOKYO — Japan’s trade deficit for the first half of this year totaled nearly 8 trillion yen ($58 billion), because of surging oil prices and a sinking yen, brought on partly by the war in Ukraine, and weaker global demand.

The deficit for the period from January through June marked the second consecutive half-year of deficits. The deficit for the six months ended in June totaled 7.92 trillion yen ($57 billion), according to Finance Ministry data released today.

The deficit persisted even as imports for the six months shrank nearly 38% to 53.86 trillion yen ($390 billion), while exports grew 15% to 45.94 trillion yen ($332 billion).

In June, imports surged 46% while exports grew 19%, compared to the same month a year earlier, resulting in a trade deficit of 1.38 trillion yen ($10 billion), the biggest for the month since 2014.

By country, imports from China jumped 33% for the month on-year, while exports edged up 8%. Imports from the U.S. grew 25%, while exports rose 15%. Imports from the Middle East, source of a large share of Japan’s energy supplies, jumped 125%.

Junichi Makino, chief economist at SMBC Nikko Securities, noted that exports expanded in June supported by global demand for Japanese cars and computer chips.

The yen has been trading at about 138 yen to the dollar, down from about 110 yen a year ago, because Japan is sticking to a super-easy monetary policy of near-zero interest rates even as other nations, including the U.S., raise rates to combat inflation.

Oil prices have surged since Russia’s invasion of Ukraine in February and are now trading at around $100 per barrel.