Japan logs ¥637.6 bn trade deficit in May on weak US exports
Agencies
Japan logged a 637.61 billion yen ($4.38 billion) trade deficit in May, with auto-related shipments to the United States plunging, possibly affected by higher tariffs imposed by President Donald Trump, government data showed Wednesday.
The trade balance remained in the red for the second straight month, as overall exports fell 1.7 percent from a year earlier to 8.13 trillion yen, marking the first drop in eight months, weighed down by an 11.1 percent fall in shipments to the United States.
Imports shed 7.7 percent to 8.77 trillion yen, down for the second straight month, reflecting lower prices of crude oil from the United Arab Emirates and coal from Australia, the Finance Ministry said in a preliminary report.
By region, Japan had a 451.7 billion yen trade surplus with the United States, down 4.7 percent from the previous year, as exports dropped for the second consecutive month.U.S.-bound shipments of automobiles tumbled 24.7 percent and those of auto parts plunged 19.0 percent, both in value terms. In volume, shipments of automobiles fell 3.9 percent, showing that export unit prices declined by over 20 percent.
The Trump administration imposed a 25 percent tariff on imported vehicles in April as well as on auto parts in May, in a move set to deal a blow to Japan's mainstay auto sector, which sees the United States as a key market.
A ministry official said the latest data could have reflected moves by Japanese automakers to increase shipments of lower-priced models or cut export prices of their products in response to heavier tariffs.
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In terms of volume, however, U.S.-bound automobile exports dipped just 3.9%, indicating that the biggest Japanese exporters were absorbing the tariff costs. 'The value of automobile exports to the U.S. fell, but their volume did not drop that much,' Daiwa Institute of Research economist Koki Akimoto said. 'This indicates Japanese automakers are effectively shouldering the tariff costs and not charging customers.' So far, major Japanese automakers have refrained from price increases in the U.S. to mitigate the tariff costs, except for Subaru and Mitsubishi Motors. 'They are buying time right now to see the course of Japan-U.S. trade negotiations,' Akimoto said. The absence of price hikes could affect their profits, but their fiscal base is generally solid, he added. While Japanese stocks and the yen showed little reaction to the data, shares of car companies have come under pressure this year due to concerns about the tariff impact. 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Qatar Tribune
7 hours ago
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Japan logs ¥637.6 bn trade deficit in May on weak US exports
Agencies Japan logged a 637.61 billion yen ($4.38 billion) trade deficit in May, with auto-related shipments to the United States plunging, possibly affected by higher tariffs imposed by President Donald Trump, government data showed Wednesday. The trade balance remained in the red for the second straight month, as overall exports fell 1.7 percent from a year earlier to 8.13 trillion yen, marking the first drop in eight months, weighed down by an 11.1 percent fall in shipments to the United States. Imports shed 7.7 percent to 8.77 trillion yen, down for the second straight month, reflecting lower prices of crude oil from the United Arab Emirates and coal from Australia, the Finance Ministry said in a preliminary report. By region, Japan had a 451.7 billion yen trade surplus with the United States, down 4.7 percent from the previous year, as exports dropped for the second consecutive month.U.S.-bound shipments of automobiles tumbled 24.7 percent and those of auto parts plunged 19.0 percent, both in value terms. In volume, shipments of automobiles fell 3.9 percent, showing that export unit prices declined by over 20 percent. The Trump administration imposed a 25 percent tariff on imported vehicles in April as well as on auto parts in May, in a move set to deal a blow to Japan's mainstay auto sector, which sees the United States as a key market. A ministry official said the latest data could have reflected moves by Japanese automakers to increase shipments of lower-priced models or cut export prices of their products in response to heavier tariffs.
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