Japan logged its largest ever monthly trade deficit in January, although the number of exports grew, according to official data released by the Japanese finance ministry.
Japan suffered a shortfall of Y1.63 trillion ($17.4 billion) in January, the worst trade deficit ever recorded for a single month. The previous record was of Y1.48 trillion, in January 2012. The deficit also exceeded the economists’ expectations, as they estimated a shortfall of Y1.3 trillion.
Taro Saito of the Tokyo-based NLI Research Institute, a company focused on research on economics and finance, said the deficit did appear “a lot worse than I had expected”.
“Overall, you can not make the deficit go away that easily,” Saito said, adding that Japan is likely to see deficits over the coming months.
The yen has tumbled over the past few months, driven by expectations of aggressive monetary easing under Prime Minister Shinzo Abe. A lower yen is good for the local exporters, but lately Europe has made accusations that Tokyo is trying to manipulate currency rates on purpose, the international press comments.
The yen was trading around 93.70 to the dollar early Wednesday.
Yoshiro Sato, economist at Credit Agricole Bank, said “the huge deficit at the beginning of the year is, as we expect, likely to result in the annual trade balance remaining in deficit for the third straight year in 2013.”