Japan records trade deficit as oil imports surge amid Middle East conflict

Summarised from 2 outlets · Updated 21 Oct, 06:08 · Archive

Japan recorded a trade deficit of 2.81 trillion yen in the first fiscal half as oil import prices soared due to Middle East conflict.

Japan's trade deficit reached 2.81 trillion yen for the April-September period, according to government data released Wednesday. Exports grew 18.4 per cent to 63.5 trillion yen, while imports soared 20.4 per cent to 66.3 trillion yen, both record highs for the country.

The deficit reflects the impact of Middle East conflict, which has disrupted Japan's access to the Strait of Hormuz, its primary route for oil shipments. Resource-poor Japan imports virtually all its oil and has been forced to source supplies from alternative routes at higher cost. Brent crude, the international benchmark, has risen from $70 a barrel in February to approximately $100 recently, with prices climbing above $110 in prior months. Analysts say prices are unlikely to ease soon.

Soaring oil costs affect multiple sectors beyond energy, including plastic goods and shipping. The weakening yen compounds the pressure, with the U.S. dollar trading at around 150 yen. The Bank of Japan has been gradually raising interest rates to support the currency, raising its benchmark rate to 1.25 per cent from 1.0 per cent last month, a 31-year high. The central bank's monetary policy board meets again next week.

How it is being reported

• Japan records a trade deficit as oil imports soar because of conflict in the Middle EastJapan’s trade deficit has reached 2.81 trillion yen, or $17.8 billion, for the first fiscal half, according to government data, as the war in Iran sent oil import prices soaring.News4Jax · 21 Oct, 05:30
• Japan records a trade deficit as oil imports soar because of conflict in the Middle EastJapan’s trade deficit has reached 2.81 trillion yen, or $17.8 billion, for the first fiscal half, according to government data, as the war in Iran sent oil import prices soaring.Clickorlando · 21 Oct, 05:30

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

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