Japan exports sadden as trade deficit widens in April

Japan's exports for April were disappointing

Japan's exports for April were disappointing

Japan’s exports sadden as they increased less than expected in April while the country’s trade deficit expanded significantly in the month. The Japan’s economy has a long way ahead to finally revive, but it seems that the weaker yen has not started bearing fruits yet. The disappointing results for April were mainly driven by weak demand from key trading partners, including the European Union and China.

Dissatisfying Japan’s exports

On the 22nd of May, the Finance Ministry issued data indicating that Japan’s exports increased approximately 3.8 percent on a year-on-year basis to roughly Y5.78 trillion. The results fell short of analysts’ estimates of growth ranging 5.0 percent to 5.9 percent. The weaker yen started to have influence on shipments, yet the Japanese authorities had anticipated more spectacular  and comforting results. Also analysts note that they anticipated a more impressive rise in Japan’s exports due to the weak yen.

The detailed findings showed Japan’s export to the crisis-hit European Union slumped around 3.5 percent on a year-on-year basis. The world’s third economy, however, saw its exports to China increase around 0.3 percent in April from a year earlier, while shipments to the US climbed staggering 15 percent in the month. According to the findings, the US is the country’s biggest export partner, while China dropped to the second position as Japan’s exports to the world’s second economy suffered from the ongoing territorial dispute over the Senkaku islands.

As for imports, Japan saw them surge around 9.4 percent in April from a year earlier, topping analysts’ estimates of a modest 6.5 percent rise.

The Finance Ministry informed that the country recorded a deficit of approximately Y879.9 billion (around $8.6 billion) in April. It was a shocking 70 percent increase from a year earlier. Indeed, the deficit for April exceeded significantly analysts’ estimates of a Y621 billion deficit.

Weaker yen

The fact is that analysts and even the Japanese authorities expected more optimistic results for April as they reposed hoped in the weakening yen. However, the weak yen did not bring the expected results.

It seems that the weak yen, which is one of the foundations of the Abenomics, is not the magic potion. Analysts underline that for the stronger and more spectacular impact of the weakening yen, the Japan economy will have to wait a little bit longer. Undeniably, the weak yen has already boosted the confidence of consumers and businesses, yet Prime Minister Shinzo Abe is still waiting for some more comforting results. But the fact is that it will take months or even longer to see a significant impact of the weaker yen on the Japan’s economy and trade deficit as well.

The Japanese authorities should continue their efforts aimed at reviving the country’s economy as they cannot stop halfway.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Recent Posts

United to recall furloughed employees as travel recovers

United to recall furloughed employees as travel recovers

The fading of the pandemic and the rollout of vaccines has brought in some good cheer for the floundering air travel industry. More countries have opened up for business and are al
10 hours ago
UK’s Sanne agrees to consider Cinven bid

UK’s Sanne agrees to consider Cinven bid

Sanne, a UK fund administration business that provides alternative asset and corporate services, has agreed to hold talks with private equity firm Cinven over a potential £1.4bn t
21 hours ago
Global stocks rise as investors ignore inflations indicators

Global stocks rise as investors ignore inflations indicators

Global stocks rose to an all-time high, with investor showing confidence in a strong economic recovery from coronavirus and the vaccine effect, but the market is still a bit cautio
21 hours ago
UK watchdog whacks Amazon with probe for unfair data collection practices

UK watchdog whacks Amazon with probe for unfair data collection practices

The Competition and Markets Authority will focus on whether Amazon, Inc. favors merchants that use its delivery services.
4 days ago
Altice buys 12 percent stake in BT worth £2 billion

Altice buys 12 percent stake in BT worth £2 billion

Altice said it did not intend to make a bid for the British Telecoms company, though the takeover code also does not allow it to make an unsolicited buyout offer for six months wit
4 days ago
G7 countries agree on broad principles of minimum corporate tax deal

G7 countries agree on broad principles of minimum corporate tax deal

The world’s richest nations (G7) reached a landmark accord setting a global minimum corporate tax rate for multinationals. Would it be effective in tackling tax evasion and avoid
4 days ago