Japan’s trade deficit narrows as fuel price falls

Japan’s finance ministry said on April 20 that its trade deficit narrowed to 754.5 billion yen ($5.6 billion) from 898.1 billion yen in February.

Economists forecast a deficit of 1.29 trillion yen.

Imports grew 7.3 percent from last year, the smallest gain in two years, as a stronger yen and lower prices for commodities including oil curbed import costs. Exports rose 4.3 percent from 2022, led by the automotive sector.

Japan’s deficit was less than the previous month but has been ongoing and is seen as affecting the country’s recovery prospects.

The Bank of Japan will hold a monetary policy meeting next week, the first under new Governor Kazuo Ueda, as questions and speculation mount about when to adjust the monetary policy.

Bank of Japan officials are concerned about changing or eliminating yield control incentives shortly after the offshore banking crisis, according to Asharq Business.

The latest data also comes amid concerns about a global economic slowdown. Global central banks have been raising interest rates to combat inflation, although their tightening cycles are waning.

March exports to the US rose 9.4 percent, the weakest level since October 2021, while the value of shipments to the EU grew by 5.1 percent, the lowest level since February 2021. Economists said Japanese exports could slow further in the coming months as borrowing costs rise.