TOKYO — Japan’s exports in January grew less than expected as manufacturers faced pressure from slowing overseas demand for cars and struggled with global supply constraints.
The world’s third-largest economy ran its biggest trade deficit in a single month in eight years, as persistent rises in fuel and raw material costs swelled imports, the value of which outstripped shipments.
The growing trade deficit highlights the export-reliant economy’s exposure to soaring commodity and raw material costs, on which manufacturers rely for producing goods at home.
Exports rose 9.6% year-on-year in January, Ministry of Finance data showed on Thursday, below a median market forecast for a 16.5% increase in a Reuters poll. It followed 17.5% growth in the prior month.
By region, exports to China, Japan’s largest trading partner, shrank 5.4% in the 12 months to January, posting its first contraction in 19 months on weaker general machinery shipments to the country.
US-bound shipments, another key market for Japanese goods, grew 11.5% in January, as stronger machinery shipments outweighed a fall in car exports.
Imports surged 39.6% in the year to January, versus the median estimate for a 37.1% increase, bringing the trade balance to a deficit of 2.1911 trillion yen ($18.99 billion), compared with the median estimate for a 1.607 trillion yen shortfall.
Separate government data showed core machinery orders, which serve as a leading indicator of capital spending in the coming six to nine months, were up 3.6% in December from the prior month, better than an expected 1.8% fall.
Manufacturers expected core orders to decline 1.1% in January-March, after a 6.5% gain in the previous quarter.
Japan’s economy grew slightly less than expected in the final quarter of 2021 as falling coronavirus cases helped prop up consumption, government data showed on Tuesday, though a record surge in Omicron variant cases and the high raw material prices are clouding the outlook. ($1 = 115.3700 yen) (Reporting by Daniel Leussink and Kantaro Komiya; Editing by Lincoln Feast.)