TOKYO: Japan’s trade balance swung to a deficit for the first time in four months as imports of chips and other electronic components soared.
The trade balance flipped to a 378.6 billion yen (US$2.36bil) deficit in May on an unadjusted basis, the Finance Ministry reported yesterday. Analysts had forecast a 547.6 billion yen deficit.
The value of imports increased 12.5% in May from a year ago, while the value of exports gained 17%.
The gain in imports was driven by a 55% jump in the value of inbound semiconductor and electronics shipments, as well as a 48% advance in communication devices.
Oil imports plunged by both volume and price, suggesting Japan, which typically relies heavily on the Middle East for oil, found other sources of energy as the war in Iran kept the critical Strait of Hormuz waterway effectively shut off.
The nation expects to secure a stable oil supply through March 2028, according to the Trade Ministry.
Conditions for global oil supplies may improve in coming months as the United States and Iran reached an interim agreement to reopen the Strait of Hormuz, which US President Donald Trump said would reopen the waterway tomorrow after it’s signed. — Bloomberg
