Containers at a shipping terminal in Yokohama, Japan, October 18, 2021. Japan’s trade deficit widened in September as imports outpaced export growth.

Kiyoshi Ota | Bloomberg | Getty Images

Japan’s imports rose more than 40% for a fifth straight month in September to the highest value on record, Ministry of Finance (MOF) data showed on Thursday, as a slump in the yen adds to the already high costs of fuel imports.

The surge in imports outpaced export growth, resulting in a trade deficit of 2 trillion yen ($13.34 billion) and extending the streak of deficits to 14 months, which could add downward pressure on the economy. Japanese currency.

Persistent deficits will deteriorate Japan’s terms of trade, shifting domestic income overseas and undermining Japanese purchasing power.

Once welcomed to make exports more competitive, excessive yen weakness is now seen as hurting households and retailers by inflating the already high prices of imported fuels and foodstuffs. Sharp drops in the yen also increase business uncertainty in making business decisions.

MOF data showed Japanese imports rose 45.9% year-on-year in September, led by crude oil, liquefied natural gas and coal, roughly in line with economists’ median estimate. for a gain of 45.0%.

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It was the 20th consecutive month of gains and amounted to 11 trillion yen in value, the largest on record. It followed a 49.9% gain the previous month.

Exports rose 28.9% in September from the same month a year ago, driven by car shipments to the United States and demand for electronic chips and parts from South Korea. Exports rose from a 27.1% rise expected by economists, after rising 22.0% in August.

By region, exports to China, Japan’s biggest trading partner, rose 17.1% year-on-year in September, driven by demand for cars and chipmaking equipment.

Shipments to the United States rose 45.2% in the year to September, led by shipments of cars, construction and mining machinery.

Japan’s economy grew at an annualized rate of 3.5% in April-June, posting a third consecutive quarter of growth as the lifting of Covid-19 restrictions boosted consumer and business spending.

Japanese authorities spent 2.8 trillion yen selling dollars and buying yen for the first time since 1998 to prop up the Japanese currency. The yen has fallen about 20% against the dollar this year to a 32-year low.

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