Investing.com - Japan's trade balance slipped into deficit territory this July, recording a shortfall of approximately 78.7 billion yen ($538 million). This marked the first decline in exports after an impressive two-year streak of growth according to details released by the Finance Ministry on Thursday.
A slight increase in automotive shipments failed to counterbalance the downturn experienced in other sectors like semiconductor-related equipment, leading to exports falling marginally by 0.3% year-on-year to 8.73 trillion yen. On the flip side, imports saw a sharper decrease, dropping by 13.5% to 8.8 trillion yen.
This unexpected dip in annual export performance has cast some shadows over future growth prospects for Japan’s economy; this comes just one month after celebrating its first trade surplus recorded within nearly two years.
The release of these trade figures coincides with rising global concerns regarding potential negative impacts caused by aggressive monetary tightening measures recently implemented across Europe and the United States markets.
Nevertheless, there was some positive news as well: Japan’s trade surplus with their United States counterparts saw significant expansion - up by a whopping 65 percent amounting to approximately 845.92 billion yen - largely due to increasing demand for automobiles that boosted overall export levels.
On another note, however, Japan posted a reduced deficit with China downgrading it by almost 15.7 percent resulting in roughly about ¥359 billion according to the ministry.