TOKYO (AP) — Japan’s trade deficit fell to its lowest level in four years in 2015, the Finance Ministry reported Monday, as import costs dropped thanks to the collapse in oil prices.
Preliminary figures show exports rose 3.5 percent in 2015 from the year before, while imports dropped 8.7 percent. The deficit compared with a record 12.8 trillion yen deficit in 2014.
Japan slipped into deficits after the 2011 nuclear accident in Fukushima led to closures of reactors, pushing up imports of oil and gas.
Japan’s trade balance swung to a surplus in December, as oil prices tumbled and the yen gained against other currencies.
The December trade surplus of 140.2 billion yen ($ 1.2 billion) compared with a deficit of 379.7 billion yen in November and a deficit of 665.6 billion yen in December 2014.
However, exports have been weakening over the past year, as China’s economy has slowed. After rising 7.9 percent in January-June over the same period the year before, exports rose a scant 0.6 percent in July-December.
Exports to China fell 1.1 percent in 2015, to 13.2 trillion yen ($ 95.8 billion), while exports to the U.S. jumped 11.5 percent to 15.2 trillion yen ($ 128.6 billion), making the U.S. Japan’s largest export market.
Japan’s imports of crude oil, gas and other fuels plunged 43 percent in December to 1.4 trillion yen ($ 11.8 billion). In 2015, they fell 34 percent, to 18.2 trillion yen ($ 154 billion).
Weaker than expected demand in China, which is spilling into other Asian markets, has hamstrung growth in Japan. Meanwhile, the prolonged bout of low crude oil prices — normally a boon for a resource-scarce country like Japan which imports almost all of its oil and gas — is hindering progress toward a 2 percent inflation goal meant to mark the end of a long spell of growth-dampening deflation.
“The contraction in the trade deficit will likely continue, as further declines in oil prices have kept the value of imports declining in the double digits,” Merrill Lynch said in a commentary. But it added that, “With export momentum still weak, industrial production should continue to flat-line.”
Analysts said the data raise pressure on Japan’s central bank to further ease its already ultra-loose monetary policy, partly to counter recent pressures toward appreciation of the yen, which gained value against the U.S. dollar during the recent bout of gyrations in global financial markets.
In December, Japan’s exports fell 8 percent from the year before to 6.34 trillion yen ($ 53.6 billion), while its imports dropped 18 percent to 6.2 trillion yen ($ 52.5 billion). Exports to China dropped 8.6 percent while exports to the U.S. were 3.4 percent lower than a year earlier. However, exports of cars rose 17.5 percent to 1.1 trillion yen ($ 9.3 billion).
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