According to Bloomberg, Japan witnessed a bigger-than-expected trade deficit in May amid a surge in imports. The latest figures also showed that the country’s exports continue strengthening, signaling that Japan’s economy is rebounding in the current quarter.
The value of exports rose by 8.1% in May from a year earlier, while economists had expected an increase of 7.5%. Imports increased by 14%, beating analysts’ expectations for a 8% rise.
Japan’s trade balance was a 578.3 billion yen ($5.2 billion) deficit. Japan’s trade surplus with the United States fell by 17% to 340.7 billion yen, with the volume of steel exports plunging by 18%. However, according to Japan’s finance ministry official, the decline was not associated with US tariffs.
Exports of equipment for making semiconductors jumped by 23%, while shipments of cars rose by 7.1%, and auto parts advanced by 10%.
Meanwhile, exports to China rose by 14% in May from a year before, while shipments to the United States increased by 5.8%, and that to Europe edged up by 0.7%.
According to pundits, exports are a crucial factor supporting the Japanese economy amid the weak domestic demand. Japan's economy has recorded eight consecutive quarters of economic growth, its longest streak since 1989.
Growth in the country's GDP in the current quarter is possible as global demand is gaining momentum. At the same time, dependence on external demand makes Japan vulnerable, experts believe.
