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Japan Logs Surprise Trade Deficit in August

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TOKYO —Japan’s exports tumbled and the country logged a surprise trade deficit in August, data showed on Wednesday, reviving concerns about the economy just before the Bank of Japan wraps up a closely watched meeting.


Shipments overseas fell 9.6% from a year earlier as a strong yen clouds the country’s trade picture.


That left a trade deficit of 18.7 billion yen, the first shortfall in three months and after markets had forecast a 200 billion yen surplus.


Overall exports fell for the 11th consecutive month, with vehicle and steel shipments among the worst hit sectors.


The weak figures are bad news for the central bank as it wraps up its two-day meeting later in the day, with Japanese officials under increasing pressure to kickstart shaky growth.


Bank watchers think that BOJ policymakers may try to kickstart the economy by expanding an already massive 80 trillion yen annual asset-buying plan. But there are concerns that the bank is running out of government bonds that it can buy under the program.


Other options include cutting interest rates deeper into negative territory.


Negative rates are meant to encourage lending to people and businesses by effectively charging banks to keep excess reserves in the BoJ’s vaults. But commercial lenders have complained they are eating into their financial results.




© 2016 AFP


 

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