Media ININ Economy We Trust
Tokyo, January 19 / Japan recorded in the past year 2022 the largest annual trade deficit amounting to 19.97 trillion yen (approximately $ 155.27 billion) due to the impact of the rise in energy and raw materials prices, along with the sharp decline in the value of the yen and the increase in import duties.
The Ministry of Finance stated that the value of imports jumped by 39.2% to a record level of 118.16 trillion yen (about 918.74 billion dollars), due to the increase in the prices of imports of crude oil, coal and liquefied natural gas, while exports increased by 18.2% to 98.19 trillion yen (about 763.47 billion dollars). ), which is also a record high, supported by an increase in car and steel exports.
The decline in the value of the yen to its lowest level in more than three decades against the US dollar led to these increases, as the dollar averaged 130.77 yen in 2022, up 19.5% from the previous year.
Japan’s accession to Western countries in imposing economic sanctions on Russia led to a decline in exports to Russia by nearly 30 percent last year with the decline in shipments of electronics and machinery, while imports from Russia increased by 26.2 percent, supported by liquefied natural gas and coal.
Japan’s current account balance, a broader measure of international trade, was also hit by last year’s massive trade deficit, although economists say Japan likely stayed in positive territory with a smaller surplus than a year earlier, buoyed by returns on foreign investment from Japanese companies.
On the level of bilateral trade, Japan witnessed an expansion of its trade surplus with the United States for the second year in a row to 6.54 trillion yen ($50.85 billion), supported by strong exports of automobiles and machinery. Shipments destined for the United States increased 23.1% to 18.26 trillion yen (approximately $142 billion), while imports rose 31.5% to 11.72 trillion yen (91.12 billion dollars), led by pharmaceuticals.
Japan’s trade with China was affected as a result of the (zero Covid) policy, according to analysts, which led to Japan’s trade deficit more than doubling to 5.83 trillion yen ($45.33 billion). Imports increased 21.8% to 24.83 trillion yen (approximately $193 billion), supported by apparel, smartphones and electronic components. Exports to China increased by only 5.7% to 19.01 trillion yen ($147.81 billion).
Japan recorded a trade deficit of 2.02 trillion yen (approximately $15.7 billion) with the European Union, remaining in negative territory for the eleventh year.
Economists say the possibility of slowing growth in the United States and China – Japan’s two largest trading partners – is a concern this year, but they expect the trade balance to improve significantly in 2023 as commodity prices are likely to return to pre-coronavirus levels while the Federal Reserve continues to US monetary tightening.
Economists expected the global economy to experience slower growth, not negative growth, so Japan’s exports are likely to remain flat or rise slightly.
