Japan's merchandise trade deficit came in at 40.72 million yen ($389 million), according to official customs data. The trade balance went to a deficit for the first time in four months after the country’s exports declined. Analysts had anticipated trade surplus of 26.5 billion yen.
In May, Japanese exports decreased for the 8th successive month amid the strengthening yen and global slowdown. Exports fell by 11.3% year-on-year to 5.091 trillion yen ($49 billion) after declining by 10.1% in April. Economists had predicted a 10.4% fall in May.
According to analysts, the drop in Japanese exports was due to weakening global demand and the stronger yen which cut the value of profits brought home from overseas operations and eroded the competitiveness of the Japanese exports.
Japan’s exports to China tumbled by 14.9% from the preceding month. That marked the third straight month of decline.
The country’s exports to the United States dropped by 10.7% in May.
Imports were also very weak in May, falling by 13.8% year-on-year to 5.132 trillion yen. Imports posted a 17th consecutive monthly decline, although at a slower pace than seen in April (-23.3%).
