Japan’s trade deficit widened in April, growing nearly 8% from the previous year as the weak yen drove up the value of imports, despite a significant increase in exports. According to data from the Ministry of Finance, exports and imports both rose by 8%, with exports totaling 8.98 trillion yen ($57 billion) and imports totaling 9.4 trillion yen ($60 billion). The trade deficit for the month reached 462.5 billion yen ($3 billion).
The increase in exports was driven by higher shipments to Asia, the U.S., and the Middle East, with vehicle exports jumping 24% and exports of electrical machinery up 16%. However, imports also surged, particularly from the U.S. and the Middle East, with imports of oil and gas increasing by 15%.
The weakening yen, which has been trading at about 156 yen to the dollar, up from 139 yen a year ago, has made imports more expensive for Japan. This has been partially offset by the boost in overseas earnings for Japanese companies like Toyota Motor Corp.
The Bank of Japan’s low interest rate policy has contributed to the weakening yen, as it aims to stimulate the economy and encourage lending. In contrast, the U.S. has raised interest rates to combat inflation, leading to a stronger dollar.
Overall, the trade deficit highlights the complex interplay of global economic factors impacting Japan’s economy, from currency fluctuations to shifting demand for goods and services.