"The volume of exports is still unimpressive as the economic growth of China is stagnating and Europe's expansion remains weak."
- Long Hanhua Wang, Economist at Royal Bank of Scotland Group Plc
Japan's merchandise trade deficit widened by as much as 10% in May to 993.9 billion yen, marking the 11th consecutive month of deficit as energy import costs continue to be high following shutdown of nuclear plants. According to the Ministry of Finance, exports increased 10.1% from the previous year to 5.77 trillion yen, the most since 2010, amid weak national currency, which has already lost more than 20% versus major counterparts – the U.S. Dollar and Euro, providing a boost to exporters and Shinzo Abe's plan to revive Japan's economy. Nevertheless, falling Yen's value has pushed up costs for natural gas, crude oil, and other commodities for the resource scarce country.
The data indicates a robust growth in outbound shipments to key markets with exports to the U.S. increasing 16.3%, while to China—8.3%. Japan's efforts to improve trade relations with the rest of Asia proved to be yielding results, with exports surging as much as 11% to 3.2 trillion yen. However, overseas sales to the EU declined 5%. Meanwhile, imports also surged 10% in May from a year earlier to 6.76 trillion yen, the ministry said, missing expectations for 11% after gaining a revised 9.5% a month earlier.
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