Japan said that it experienced a trade deficit that was wider than expected, after demand from Europe and China both fell. It is the ninth trade deficit for Japan in 12 months.
Bloomberg reported Wednesday that the numbers came in at a shortfall of 517.4 billion yen ($6.5 billion), after analysts had said in a survey that they expected a deficit of a little more than half that much, at 270 billion yen. Lessened demand in Europe, still battling its financial crisis, and in China led to reduced shipments and higher oil prices boosted import figures.
The news could lead to a call for more stimulus, as Japan still works on its recovery from the triple disaster of earthquake, tsunami and nuclear woes in 2011. The nuclear disaster boosted the country’s imports of alternative fuels, including oil, adding to the imbalance.
Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo, voiced that view in the report, saying, “Japan needs more monetary stimulus to sustain the recovery. Sentiment among manufacturers is deteriorating globally, triggered by Europe’s fiscal problems, and that’s adversely affecting Asian economies.”
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Shipment of wares to the European Union (EU) fell by the most since October 2009, down 25% in July from 2011. Shipments to China also fell substantially, lower in July by 12% from a month earlier. According to the Finance Ministry in Tokyo, the July trade deficit was the worst for that month in any year since 1979.