Japan recorded in April a trade deficit of 462.51 billion yen ($3 billion), as higher crude oil prices and a sharp drop in the value of the yen boosted the cost of imports, offsetting robust growth in exports, according to data from the Japanese government.
Exports reach record high
Exports rose for the fifth consecutive month, up 8.3 percent to 8.98 trillion yen, a record high for the month of April. Imports also increased by 8.3 percent, reaching 9.44 trillion yen, the largest ever for the month. The growth in exports was driven by strong demand for hybrid cars, semiconductor-manufacturing equipment, and computer chips. Imports, meanwhile, were bolstered by higher crude oil and aircraft prices, as the yen weakened by 14.7 percent against the U.S. dollar.
Oil prices surge in yen terms
Crude oil prices jumped 17.7 percent in yen terms compared to 2023, while the increase was only 2.6 percent in dollar terms. Exports to the U.S. continued their growth streak, rising 8.8 percent to 1.80 trillion yen, marking the 31st consecutive month of expansion.
Read more: Japan’s current account surplus soars to record high of $162.56 million in fiscal 2023
10-year bond yield climbs above 1 percent
In a separate development, Japan’s 10-year government bond yield climbed above 1 percent on Wednesday for the first time in 11 years, as investors anticipate higher borrowing costs due to the central bank’s policy shift. In recent weeks, investors have increased their bets that the Bank of Japan (BoJ) will raise interest rates further and begin to reduce its purchases of government debt, after it ended eight years of negative rates in March.
The benchmark 10-year borrowing costs in Asia’s largest advanced economy rose as high as 1.005 percent, a level not seen since May 2013. The yield has been steadily increasing since May 13, when the BoJ surprised markets by buying a smaller than expected amount of five- to 10-year Japanese government bonds during its regular operation.
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