Japan records record trade deficit as oil prices soar

Summarised from 2 outlets · Updated 21 Oct, 06:32 · Archive

Japan recorded a 2.81 trillion yen trade deficit in the first half of the financial year as oil import prices surged amid the Iran war.

Japan's trade deficit reached 2.81 trillion yen for the first fiscal half, according to government data, as oil prices surged following the war in Iran. Imports soared to a record 66.3 trillion yen, up 20.4 per cent year-on-year, whilst exports grew 18.4 per cent to 63.5 trillion yen. Both figures represent record highs for Japan.

The conflict has disrupted Japan's access to the Strait of Hormuz in the Middle East, forcing the country to source virtually all its imported oil from alternative routes at significantly higher cost. Brent crude, the international standard, has soared from $US70 a barrel in February to around $US100 lately, having peaked above $US110 in recent months. The rising oil prices affect a wide range of sectors, including plastic goods and shipping costs. Analysts say prices are unlikely to ease soon.

A weakening yen compounds the problem by driving up import costs further, with the US dollar trading at around 150 yen. In response, the Bank of Japan raised its benchmark interest rate to 1.25 per cent in September, a 31-year high, in an attempt to prop up the currency and ease the burden on the economy. September's trade deficit totalled 536.6 billion yen, marking the fifth consecutive month of deficits.

How it is being reported

• Japan records a trade deficit as oil imports soarThe ballooning price of oil due to the Iran war has resulted in Japan's imports hitting a record in the first half of the financial year.The West Australian · 21 Oct, 05:54
• Japan records a trade deficit as oil imports soarThe ballooning price of oil due to the Iran war has resulted in Japan's imports hitting a record in the first half of the financial year.Perth Now · 21 Oct, 05:54

In this story: Japan · Iran · Bank of Japan · Strait of Hormuz · Middle East

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