Japan’s exports and imports in December hit a record high in value as supply bottlenecks ease
TOKYO (Reuters) – Japan’s exports and imports in December hit record highs in yen value terms, data showed on Thursday, as supply bottlenecks eased in late 2021 in a context of rising prices.
However, a continuing shortage of semiconductors has remained a headache for Japanese companies such as automaker Toyota, which cut its short-term production target this week, in addition to uncertainties around the Omicron variant.
“There are considerable uncertainties” from Omicron, said Takeshi Minami, chief economist at the Norinchukin Research Institute, adding that it could derail various aspects of Japan’s economy, from supply chains to manufacturing. foreign business to domestic consumption.
Exports in December rose 17.5% from a year earlier, according to Finance Ministry data, beating the 16.0% gain expected by economists in a Reuters poll, but lower than the rise in 20.5% in November.
Yen-denominated exports and imports hit record highs of 7,881.4 billion yen ($69 billion) and 8,463.8 billion yen, respectively, the highest since comparable data became available in January 1979, largely because rising inflation affected both streams.
Steel exports rose 75.1% in value year on year, but export volume rose 10.2%, suggesting soaring raw material prices pushed up the value of manufactured products in Japan sold overseas.
Exports to the United States rose 22.1%, with car shipments marking their first year-on-year rise in five months at 11.9%, as Japanese factory output rebounded.
Shipments to China, Japan’s biggest trading partner, rose 10.8% in December from a year earlier.
ANNUAL TRADE DEFICIT
Imports from the world’s third-largest economy jumped 41.1% in December on rising commodity costs and a weak yen, against expectations of a 42.8% rise and growth 43.8% the previous month.
This led to a trade deficit of 582.4 billion yen ($5.09 billion) in December, against expectations of 784.1 billion yen.
For the whole of 2021, Japan recorded a trade deficit of 1,472.2 billion yen, the first in two years and after a surplus of 388.3 billion in 2020, amid rising costs fuel import.
“Rising import costs are common in advanced economies, but (Japan’s) problem is the low pass-through of import costs to domestic prices,” Norinchukin’s Minami said.
“The recent combination of a weak yen and high fuel costs has caused considerable damage to the Japanese economy.”
The Bank of Japan said a weak yen should continue to have a positive impact on the Japanese economy, even as rising prices for imported goods hurt households.
Japan is expected to have recorded 6.5% annualized growth in the last quarter of 2021 thanks to a strong rebound in consumption, according to the latest Reuters poll.
But policymakers have been wary of the risks associated with the rapid spread of the Omicron variant, as Japan recorded its highest daily COVID-19 infections this week.
($1 = 114.2100 yen)
(Reporting by Kantaro Komiya; Editing by Himani Sarkar)