TOKYO (TR) – Japan posted a surprise trade deficit in October as exports fell for the first time in three months amid the yen’s appreciation, Bloomberg reported.
Japan’s Finance Ministry said Monday shipments for October fell 3.7 percent from a year earlier, according to Bloomberg. That was worse than the estimates of 29 economists surveyed by the news agency. Higher energy and food prices led to a 17.9% surge in imports, bringing the nation’s trade balance to 273.8 billion yen, the government report said.
“A sharp slowdown in demand from Eurozone countries should be weakening exports from Asia, in turn leading to weakness in exports from Japan,” Bloomberg cited Masayuki Kichikawa, chief economist at Bank of America Merrill Lynch in Tokyo, as saying.
Exports to China, Japan’s largest overseas market, dropped 7.7 percent, the largest since May, Bloomberg reported.
The debt crisis in the euro region has increased the yen’s appeal as a safe haven, strengthening the Japanese currency and further hurting the nation’s exporters. Last month, the government intervened for the third time this year in the FOREX market after the yen hit a post-World War II high of 75.35 yen to the dollar.