Japan Posts First Trade Deficit in Four Months as Energy Costs Rise

Japan recorded a trade deficit of ¥378.6 billion ($2.4 billion) in May, its first monthly deficit in four months, according to government data released recently.

Cargo containers are seen at a Japanese port as rising energy costs contribute to the country's first trade deficit in four months. (Photo: Tokyo Metropolitan Port Authority Facebook)

A preliminary report showed that crude oil imports by volume fell more than 57 percent amid conflict in the Middle East, Kyodo News reported.

Finance Ministry data highlighted the government's efforts to secure fuel supplies from alternative sources, including the United States. However, those purchases came at higher costs due to increased transportation and insurance expenses.

Japan purchased crude oil at a record-high price of ¥114,076 per kiloliter, up 67.2 percent from a year earlier.

The average price also reached $114.6 per barrel, 52 percent higher than the previous year. A ministry official said the elevated prices likely reflected changes in shipping routes.

Analysts warned that rising procurement costs could hurt corporate profits and lead to higher prices for consumer goods that rely on petroleum-based materials.

Despite the deficit, Japan's trade balance improved significantly from a year earlier, with the shortfall shrinking 42.8 percent.

Exports rose 17 percent to ¥9.51 trillion, driven by shipments of semiconductors to China and automobiles to the United States. Imports increased 12.5 percent to ¥9.89 trillion, largely due to purchases of smartphones from China, according to the report. Mainichi Japan also reported on the data.