--Haruhiko Kuroda, BoJ Governor
The trade gap plummeted almost 60% in January from the previous year as exports soared and the import bill for oil and gas declined due to sharply lower crude oil prices. The deficit stood at 1.18 trillion yen, beating analysts' expectations. Exports soared a stronger-than-expected 17% from the preceding year to 6.1 trillion yen, led by strong shipments of vehicles and machinery. Imports dropped 9% to 7.32 trillion yen, with almost 25% decline in imports of oil and gas. On a monthly basis, Japan recorded its 31st-straight gap in trade in January, adding to challenges of Prime Minister Shinzo Abe in underpinning economic growth with a weaker Yen. The merchandise trade gap rose to 1.18 trillion yen in January from 665.2 billion yen in December, Japan's Ministry of Finance reported.
Meanwhile, Japan's all industry activity declined in December in line with expectations, after remaining flat in the previous month, data from the Ministry of Economy, Trade and Industry showed. The all industry activity index dropped 0.3% month-on-month in December, marking the first drop in four months. On an annual basis, the all industry activity index fell for the ninth month in a row in December. It was down by 0.9%, following November's 2.0% decrease.
Official data released earlier in the week showed the Japanese economy growing 0.6% in the final quarter, powered by export growth which added 0.5 percentage points to the headline figure. However, imports provided a 0.3 percentage-point drag on growth.
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