According to a Reuters poll, Japan’s trade imbalance is expected to reach a nine-year high in August due to a weak yen.
Japan likely reported its worst trade imbalance in more than nine years in August as the yen plunged to 24-year lows, a Reuters poll indicated Friday.
The dramatic drop in the yen has prompted fresh warnings from Japanese officials this week. Economists say the currency weakness could push core inflation to roughly 3% by year’s end, reducing consumer purchasing power.
The August trade balance likely finished in a deficit of 2.398 trillion yen ($16.80 billion) since imports rose 46.7% and exports rose 23.6%.
The predicted deficit would be the largest since January 2014’s 2.79 trillion yen gap.
“While crude oil prices paused after July, the yen’s drop pushed up import costs,” noted Mizuho Research and Technologies analyst Kenta Suwa.
The world’s third-largest economy increased 3.5% annually in April-June after COVID-19 limitations were eased, revised GDP data showed Thursday.
Inflation and a poor global economy threaten Japan’s growth outlook, say economists.
Other statistics due next week is likely to show Japan’s annual wholesale inflation hit 8.9% in August, reaccelerating from 8.6% in July, indicating firms face relentless price pressures that are eroding earnings.
The poll also revealed that core machinery orders, a leading sign of company spending, were predicted to drop 0.8% month-over-month in July.
Trade numbers will be released at 8:50 a.m. the machinery orders data at 8:50 a.m. 14.09. (2350 GMT, Sept. 13).
Wholesale price data will be released at 8:50 a.m., Sept. 13 (2350 GMT, Sept. 12).
(This item corrects paragraph 3’s trade balance to 2.398 trillion yen, not 2,398.2 trillion, and paragraph 4’s January 2014 balance to 2.790 trillion yen.)
$1=142.7700 yen
