Japan trade gap widens as imports surge, capex seen solid
TOKYO — Japan’s exports jumped to a record
amount in July, boosted by global fuel inflation and a weak
yen, outweighing exports and deepening trade deficits, in a sign
of a further worsening in the terms of trade for the
The trade data came on the heels of Reuters Tankan, which
showed improvement in Japan’s business sentiment in August,
while the key gauge of corporate capital spending rebounded in
June from the previous month’s decline.
The batch of data may help ease calls for more stimulus to
back the fragile nature of Japan’s recovery after the world’s
third-largest economy logged three straight quarters of
expansion to June, led by capital spending and consumption.
The Ministry of Finance data showed on Wednesday exports
grew 19.0% in July from a year earlier, posting 17 straight
month of gains led by U.S.-bound shipments of cars and
China-bounds chip-related goods, beating economists’
expectations for a 18.2% gain.
Imports rose 47.2% in July year-on-year to a record 10.2
trillion yen, driven by costs of crude oil, coal and liquid
natural gas, versus a 45.7% rise expected, overwhelming exports
and bringing trade deficit to 1.4368 trillion yen ($10.69
billion) in July.
The yen’s fall by 23.1% from a year earlier added to higher
import costs, the data showed.
Separate data showed Japan’s key gauge of capital spending
rose 0.9% in June from the previous month, versus a 1.3% gain
expected by economists in a Reuters poll.
Compared with a year earlier, core machinery orders, a
highly volatile data series regarded as a leading indicator of
capital spending in the coming six to nine months, grew 6.5%, it
Reflecting corporate resilience, the Reuters Tankan
sentiment index for manufacturers rose 4 points to 13 in August
and is seen up further to 15 over next three months.
The service-sector index rose to 19 from 14 in July and was
seen steady in November helped in part by the lifting of
coronavirus curbs among industries such as tourism and eateries.
($1 = 134.3800 yen)
(Reporting by Tetsushi Kajimoto; Editing by Sam Holmes)