Japanese import value hit record 8.32 trillion yen in November due to rising crude oil costs

The value of Japanese imports jumped 43.8% in November to a record high due to rising crude oil prices and a weak yen, leading the country to post its largest trade deficit since January 2020, government data showed Thursday.

Merchandise imports jumped to 8.32 trillion yen (72.9 billion yen), the highest figure since comparable data became available in January 1979, while exports soared 20.5% to 7.37 trillion yen, resulting in a trade deficit of 954.8 billion yen, the finance ministry said. in a preliminary report.

The trade balance showed red ink for the fourth consecutive month, with imports increasing for the 10th consecutive month on the back of higher crude oil prices from producers such as the United Arab Emirates.

Exports increased for the ninth consecutive month, driven by strong demand for South Korean steel products and semiconductor manufacturing equipment from China.

The strengthening of Japanese exports is good news for the country’s recovery prospects. They also add to signs that easing supply constraints were helping put the global economy on a better footing – in the weeks leading up to the emergence of the omicron variant COVID-19 introduced a new element of uncertainty.

“We saw a slight relief from the supply constraints in November, but there is a risk that the omicron variant will shut down factories overseas and increase the supply constraints like the delta variant has,” said SMBC Nikko Securities Inc. economist Koya Miyamae “A weaker yen makes oil imports even more expensive, which will hurt domestic consumption.”

November’s export gains were widespread, with shipments to the US, China and the EU all recording their biggest increases since the summer. Japan’s car exports, a key driver of the economy, rose about 4%, recovering from a drop of more than a third the previous month even as supply chain grunts persist .

With rising prices for gasoline and other select items raising concerns about a decline in Japanese consumers, pressure for exports to drive the recovery is mounting. Analysts see the economy rebounding at the end of the year after contracting in the last quarter for the fifth time in eight quarters.

Yet the spread of the omicron variant since late November is now clouding the outlook to some extent as countries limit access to travelers and question whether to reinstate national restrictions. Supply bottlenecks also continue to plague manufacturers, Toyota Motor Corp. cutting production again this month due to parts shortages.

“Overall, there is a car-driven export recovery,” said economist Takeshi Minami of the Norinchukin Research Institute. “But he’s likely to stay pretty slow. Toyota has previously said its December plan to recover production levels faces delays, and it is still unclear whether it will get back on track in January given that Southeast Asia still faces challenges. COVID issues. “

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