by Staff Writers
Tokyo (AFP) Sept 20, 2012
Japan posted its second straight monthly trade deficit in August as exports fell in a sign that slowing overseas growth continues to weigh on the world's third largest economy.
Official data showed Japan had a deficit of 754.1 billion yen ($9.6 billion) in August, smaller than the year-before deficit of 777.5 billion yen but bigger than the deficit of 518.9 billion yen for July.
"The size of the deficit was within expectations, but it increased from the previous month and underlines the difficult economic environment overseas," said Junko Nishioka, chief economist at RBS Securities Japan.
She said the data painted an overall picture of weak exports and higher imports, despite a slight dip in the value of inbound goods and services during August.
"It is becoming increasingly difficult to expect an early change to this trend," she told Dow Jones Newswires.
Overall exports fell 5.8 percent to 5.05 trillion yen with shipments down 9.9 percent to Japan's biggest trade partner China amid data showing a slowing in the world's second-largest economy.
"Going forward, there remains an exchange rate risk with the strong yen and a risk of further slowdown overseas," said a ministry official briefing reporters.
Analysts expect the downturn to continue and are also starting to evaluate the potential impact of a recently heightened territorial dispute that has sparked anti-Japanese rallies in major Chinese cities.
Previous such tensions have had only a short-term impact on demand for Japanese goods.
On Wednesday anti-Japan protests in China died down as authorities apparently sought to ease tensions on the ground, although political leaders maintained their rhetoric.
Exports to the European Union fell 22.9 percent amid the region's debt crisis while US-bound shipments rose 10.3 percent with signs of a modest recovery in demand there.
Overall imports slipped 5.4 percent to 5.80 trillion yen as bills for oil and other energy imports fell.
A March 2011 nuclear power accident forced utilities to boost imports of fossil fuels to replace lost atomic capacity, with all but two of the country's reactors offline amid public safety fears.
Japan used to meet around 30 percent of its electricity needs from nuclear generation, but the tsunami-sparked meltdowns at Fukushima have left many people wary of the once-trusted technology.
-- Dow Jones Newswires contributed to this article --
Global Trade News
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