TOKYO--Japan's trade deficit halved in December from a year
earlier as exports jumped 13%, another sign that the nation's trade
balance may be starting to improve, helped by a weaker yen and
growing strength in the U.S. economy.
The monthly trade balance was also helped by sharply lower oil
prices, which limited growth of imports to just 1.9%.
But annual figures showing a record deficit for 2014 indicate
that Prime Minister Shinzo Abe's administration still has much work
to do if it is to remedy the nation's trading imbalance over the
longer term.
For the month of December, the trade deficit fell to Y660.7
billion, the 30th straight month of shortfalls, but half the figure
from the previous year and better than a deficit of Y735.1 billion
forecast by The Wall Street Journal and the Nikkei.
Mr. Abe has tried to spur economic growth by reviving the
nation's sagging exports through a weaker yen. But export growth
over the two years Mr. Abe has been in office has remained tepid at
best, with many manufacturers having located their production in
faster growing markets such as the U.S. and in Asia, instead of
exporting from Japan.
That tendency is clear from data for 2014, showing the growth of
imports outpacing that of exports, at 5.7% compared with 4.8%. As a
result, the annual deficit totaled Y12.8 trillion, or close to 3%
of the country's gross domestic product.
Among the tasks Mr. Abe faces to improve the trade balance are
bringing back manufacturing production that has been lost to
overseas, boosting exports, and reducing fossil fuel imports by
turning nuclear power plants back online.
Mr. Abe's government predicts that the trade deficit will halve
this year, thanks mainly to the lower oil prices, but also to
slighter stronger global growth.
But such a rosy scenario could change if crude oil prices snap
back again, or if the world economy grows much more slowly than
hoped for this year.
Write to Mitsuru Obe at mitsuru.obe@wsj.com
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