Japan has recorded a trade deficit for the fourth consecutive month in October, with a shortfall of 461 billion yen ($3 billion), according to the latest data released by the Finance Ministry. The trade deficit is calculated by subtracting a nation's imports from its exports.
Despite a 3.1% growth in exports compared to the previous year, driven by increased shipments of equipment for semiconductor production, imports also rose by 0.4%, surpassing the export figures.
One of the factors contributing to the trade deficit is the weakening yen and the surge in energy prices, which have kept import costs elevated. The situation is further complicated by uncertainties surrounding global trade policies, particularly with the reelection of Donald Trump as the U.S. president, who has expressed intentions to impose higher tariffs.
Exports play a crucial role in Japan's economic growth, with the country being home to major manufacturers like Toyota Motor Corp. However, concerns persist as some manufacturers have shifted production and investments overseas.
Prime Minister Shigeru Ishiba has been actively engaging with leaders from various Asian nations, Europe, and South America to strengthen economic, trade, and security relations. The impact of a depreciating currency, currently trading at around 155 yen to the U.S. dollar, compared to 140 yen a year ago, is also a cause for apprehension.
Rising inflation and energy prices are driving up import costs, while a slowdown in global demand is affecting exports. Temporary disruptions such as a recent typhoon and auto production halts in Japan have contributed to the decline in overseas demand.
Notably, exports to the rest of Asia, including countries like Singapore and Hong Kong, saw an increase, while exports to the U.S. experienced a slight decline.
