TOKYO: Japan’s trade deficit nearly halved year-on-year in February as lower oil prices helped reduce the cost of imports, official data showed on Wednesday, with analysts saying Tokyo could achieve a surplus soon.
The monthly deficit came in at 424.6 billion yen ($3.5 billion), down 47.3 percent from a year ago and well below the median forecast of 1.0 trillion yen in a survey by the Nikkei business daily.
Exports in the month rose 2.4 percent to 5.94 trillion yen, the sixth consecutive year-on-year increase, chiefly on higher shipments of automobiles, electronic parts and machine tools, the finance ministry said.
Imports fell 3.6 percent to 6.36 trillion yen, the first decline in two months, as lower oil prices helped reduce energy bills for the resource-poor nation, it said.
Lower costs of liquefied natural gas (LNG) also reduced Japan’s huge post-Fukushima energy bills.
Japan’s LNG imports remained high as utilities are forced into thermal power generation, with the country’s entire fleet of nuclear reactors still offline, more than four years after the disaster at Fukushima.
SMBC Nikko Securities said that Japan’s overall exports would expand further mainly thanks to strong demand in the US market.
Shipments bound for the United States jumped 14.3 percent in value last month, the sixth straight year-on-year gain, the ministry said.
Its exports to the European Union rose 1.9 percent but those to China plunged 17.3 percent, it said.
“The trade balance may swing back into the black as early as March and (Japan) will then expand its trade surplus,” the Japanese securities firm said in a note.
Hideaki Kikuchi, economist at Japan Research Institute, said Japan’s trade balance is likely to swing back into the black “at least temporarily.”
“It’s still hard to predict if Japan can [stay in]the black for a long period as its energy-related imports won’t decline easily,” Kikuchi said.
He also added that the recent weak yen was also pushing up imports costs.