Japan's ¥2-Trillion Deficit Biggest In Country's History

Japan posted a trade deficit of 2.03 trillion yen ($15 billion) in November after imports grew more than exports amid higher energy costs and a weaker yen, government data showed, increasing the likelihood that the resource-scarce nation will report its largest-ever yearly deficit at the end of 2022, Mainichi Shimbun reported.

Photo Insert: The fast-paced tightening has raised concern about an economic slowdown, boding ill for Japan.

The red ink was the biggest for the month of November after energy-related imports pushed up the overall import figure by 30.3 percent from a year earlier to 10.86 trillion yen, while exports grew 20 percent to 8.84 trillion yen amid robust US-bound shipments of cars and machinery, the Finance Ministry said in a preliminary report.

The yen was sharply lower in November year-on-year relative to the US dollar, inflating import costs. Crude oil was at 92,344 yen per kiloliter, up 57 percent from a year earlier.

The softer yen reflects the diverging policy paths of Japanese and US monetary authorities, with the Federal Reserve implementing aggressive rate hikes to fight inflation. The fast-paced tightening has raised concern about an economic slowdown, boding ill for Japan.

Japan was in the red for the 16th straight month and the deficit has already ballooned to 18.51 trillion yen this year, surpassing the 12.82-trillion yen loss reported in 2014 when the deficit hit a record high, according to the ministry.

"We have likely reached a point where the trade deficit has stopped getting bigger and bigger, but December will be another month of red ink," said Kota Suzuki, an economist at Daiwa Securities Co.

"The outlook for exports is a concern because the Chinese economic slowdown will continue despite an easing of its 'zero-COVID' policy, and monetary tightening in the US and Europe will be a drag," he added.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic