Japan trade deficit widens in August on weak exports

Japan's trade deficit hit an eight-month high in August, despite continuous declines in imports, as exports growth was the weakest since May.

The trade gap expanded from ¥268.1 billion in July to ¥569.7 billion last month, according to new customs data on Thursday, coming in slightly weaker than the forecast deficit of ¥540 billion.

Exports grew 3.1% year-on-year in August, slowing from 7.6% in July, and missing the market forecast of a 4.3% increase. Japanese exports to China fell 4.6% year-on-year, but exports to the US were up 11.1%. Transport equipment was the highest positive contributor to exports in August, while manufactured goods were the biggest negative contributor.

Imports were down 3.1% over the same period, largely unchanged from the pace of decline seen a month earlier, but falling further that the forecast decline of 2.5%. Goods imported from China shot up 14.6% year-on-year, but imports from the Middle East tumbled 37.9%, reflecting lower oil prices.

On Tuesday, with the release of the Bank of Japan's (BoJ) Statement on Monetary Policy, central bankers assessed that exports had recently been "more or less flat, due to the effects of the slowdown in emerging economies."

In previous policy statements, the BOJ had said that exports had been picking up, albeit with some fluctuations.

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