By Daniel Leussink
TOKYO (Reuters) – Japan reported a wider-than-expected trade deficit in February as an energy-driven surge in import costs added to vulnerabilities for the world’s third-largest economy.
Exports rose slightly less than expected despite a rebound in China-bound shipments, in a worrying sign for an economy facing growing uncertainty due to global supply constraints and Russia’s invasion of Ukraine.
Imports surged 34.0% in the year to February, Ministry of Finance data showed on Wednesday, above a median market forecast for a 28.0% gain in a Reuters poll.
That outstripped a 19.1% year-on-year rise in exports in February, resulting in a 668.3 billion yen ($5.65 billion) trade deficit, which was bigger than the 112.6 billion yen shortfall expected in a Reuters poll.
February’s deficit was, however, narrower than January’s 2.19 trillion yen gap, which was the biggest in a single month in eight years.
By region, exports to China, Japan’s largest trading partner, expanded 25.8% in the 12 months to February on stronger semiconductor machinery shipments to the country, after posting a Lunar New Year-linked contraction in the prior month.
Exports to the United States, the world’s largest economy, grew 16.0% in February, on stronger shipments of cars and semiconductor machinery.
Japan’s economy rebounded less than initially estimated in the final quarter of 2021, the government said last week, on weaker growth in consumer and business spending.
The downgrade in fourth quarter growth was bad news for policymakers tasked with sustaining a fragile recovery as the Ukraine crisis clouds the outlook for the global economy.
($1 = 118.2800 yen)
(Reporting by Daniel Leussink; Editing by Sam Holmes)