By AKANE VALLERY UCHIDA
February 22, 2008
TOKYO — Japan had a trade deficit for the first time in a year during January because of high oil prices, while exports to the U.S. declined, adding to worries about the world’s second-largest economy.
The Ministry of Finance said the trade deficit came to 79.3 billion yen ($733 million) in January, much larger than the 5.6 billion yen deficit forecast on average by economists surveyed by Dow Jones and Nikkei.
Separately, data from the Ministry of Economy, Trade and Industry showed that Japan’s economic activity fell 0.2% in December from November because of continuing weakness in the construction sector.
The large trade deficit and weakened domestic economic activity come as other economic data show increasing signs of a slowdown in Japan’s six-year-old economic recovery. Officials, such as Economy Minister Hiroko Ota, these days frequently voice caution over the growing downside risks to the economy.
Behind the trade balance’s move into the red was the ballooning import bill from record oil prices. Total imports in January rose 9% year-to-year. Exports were up 7.7%, but analysts said the growth has lost momentum, suggesting external demand may be weakening.
Meanwhile, the trade ministry’s all-industries index, considered a close approximation for gross domestic product as measured by industrial- and service-sector output, stood at 107.2 in December, down from 107.4 in November and the second consecutive month of decline.
–Tomoyuki Tachikawa and Takashi Mochizuki contributed to this article.
Write to Akane Vallery Uchida at [email protected]
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