TOKYO (AFP) -Japan’s trade deficit swelled to a record $109 billion in 2014, data showed Monday, mostly because of huge post-Fukushima energy bills, but analysts said a recent drop in oil prices would shrink the yawning gap.
The shortfall of 12.78 trillion yen, Japan’s fourth-consecutive annual deficit, was 11.4 per cent wider than 2013 and was the worst since records began in 1979, according to the finance ministry.
Fuel costs have weighed heavily on Japan as the resource-poor country struggles to plug a huge energy gap after the 2011 atomic crisis forced the shutdown of nuclear reactors that once supplied more than a quarter of its power.
That problem has been exacerbated by a sharp fall in the yen, which hiked the cost of energy imports purchased in foreign currencies.
In December alone, however, Japan’s trade deficit almost halved over the previous year to 660.7 billion yen, largely thanks to falling oil prices.
The trade balance last month was also helped by a better-than-expected 12.9 per cent jump in exports.
Japan’s trade deficit “is set to narrow further as lower energy prices are still not fully reflected in import costs”, Capital Economics said in note after the figures were published.
“The key development for the trade balance in coming months… remains the plunge in the price of crude oil since last summer.
“So far, this is only partly reflected in the cost of imported petroleum.
“Lower energy prices may briefly return the trade balance to surplus in coming months, before a weaker yen and a rebound in the oil prices push it back into deficit,” it said.
Crude prices have lost more than half their value since June, sitting at less than $50 a barrel.
The data on Monday showed Japan’s imports rose 5.7 per cent to a record 85.89 trillion yen in 2014, outstripping a 4.8 per cent jump in exports to 73.11 trillion yen.
Exports to the European Union were up 8.3 per cent over the year, while US-bound shipments grew 5.6 per cent. China-bound exports rose 6.0 per cent in 2014, the data showed.