Japan Records Fourth Straight Trade Deficit Amid Soaring Oil Prices
Japan has recorded its fourth consecutive month of trade deficits, with the country's Finance Ministry reporting a deficit of ¥1.1 trillion (US$7 billion) in August.
The deficit was largely driven by soaring oil prices due to conflicts in the Middle East, which have sent import costs skyrocketing.
Japans' imports rose 28% year-on-year to ¥11.15 trillion (US$71.9 billion), while exports increased 19.3% to ¥10 trillion ($64.5 billion). The price of Brent crude has risen significantly, from around $60 per barrel last year to over $100 in recent months.
The yen's value has been affected by the deficit, with some analysts predicting it could fall below 150 against the US dollar later this year. The Bank of Japan is set to meet later this week to discuss interest rates, with markets expecting a hike to 1.25% from the current 1%. A stronger yen would help offset the country's reliance on imports, but could hurt exporters like Toyota Motor Corp.