Japan’s trade deficit has risen 65 per cent in the past year to hit its highest level on record.
A report from the finance ministry of Japan reveals that the annual trade deficit rose significantly over the course of 2013 to ¥11.5trn (£68bn), marking the third consecutive year that Japan has reported an annual trade deficit.
The monthly deficit for December 2013 also reached ¥1.3trn, a record shortfall lasting 18 consecutive months.
A weaker yen is blamed for the sharp up tick in Japan’s deficit after it forced up the cost of energy imports.
Exports rose 15 per cent during the final month of 2013 while imports experienced a sharper increase of 25 per cent.
Trade data from the Japanese finance ministry details that Japan’s imports of liquefied natural gas increased by 0.2 per cent by volume in 2013 from a year earlier, while the value of these imports rose by almost 18 per cent.
Capital Economics Japan economist Marcel Thieliant says: “The deficit will likely widen further in the first quarter of this year as consumer demand soars ahead of the tax hike, but it should start to narrow again from April.
“Beyond that, a tug-of-war between two factors will likely result in the deficit remaining deeply in the red. On the one hand, we expect the yen to weaken further, which should keep the cost of imports elevated. On the other hand, export volumes are likely to pick up as global growth is accelerating.”