Japan’s trade deficit narrowed in February, due to a plunge in import costs due to lower crude oil prices.
The Finance Ministry said two weeks ago that the trade deficit fell 47 percent from a year earlier to 424.6 billion yen ($3.5 billion) last month, compared with a gap of 1.18 trillion yen in January. The gap was smaller than expected, but belied a weakening in export volumes.
Japan’s trade deficit usually narrows in February. Adjusted for seasonal factors, it actually expanded, while exports fell from the month before with a sharp drop in export volumes. In yen terms, vehicle and machinery exports rose, while imports from the Middle East, mostly of oil and gas, fell 43 percent.
Japan’s exports to the U.S. jumped 14 percent from a year earlier to 1.2 trillion yen (about $10 billion), but shipments to China fell more than 17 percent as the Chinese economy slowed.
Japan became a net importer as its import bill for oil and gas soared when its nuclear power plants were idled following the disaster at the Fukushima Dai-Ichi plant in March 2011. Movement of manufacturers overseas has also reduced export volumes, though the recovery of the U.S. economy has helped boost shipments to North America in recent months.