TOKYO (AP) – Japan's trade deficit rose nearly 8% in April from a year earlier as a weaker yen boosted imports, offsetting gains from a surge in exports, government data showed Wednesday.
According to the Ministry of Finance, total exports were 8.98 trillion yen ($57 billion) and total imports were 9.4 trillion yen ($60 billion), both an 8% increase from the previous year. The trade deficit for the month was 462.5 billion yen ($3 billion).
Shipments to the rest of Asia, the United States and the Middle East increased significantly, while exports to Europe remained flat. Imports from the United States increased nearly 30 percent from a year ago, while imports from the Middle East increased 15 percent, mainly oil and gas.
Auto exports rose 24 percent and electrical machinery exports increased 16 percent. Imports of machinery parts surged amid rising demand for auto parts and computer chips. Japan's auto production is recovering after disruptions caused by the pandemic that hit supply chains around the world.
Imports also increased significantly as the U.S. dollar continued to strengthen against the yen, which recently traded at around 156 yen to the dollar, up from 139 a year ago and briefly reaching 160 yen.
A weaker yen makes Japanese purchases from overseas more expensive but also increases the value of overseas earnings converted into yen for big companies such as Toyota Motor Corp.
Oil and natural gas imports increased by more than 23% in April compared to the same month last year, and imports of food and manufacturing raw materials also increased.
One factor behind the yen's weakness is Japan's low interest rates. The benchmark interest rate remains just above zero, a policy adopted by the Bank of Japan to prop up the country's stagnant economy and encourage lending.
The United States raised interest rates to curb inflation. The rising rate of return on dollar investments caused the dollar to rise in value against other currencies.
___
Yuri Kageyama is in X: https://twitter.com/yurikageyama
