TOKYO - Japan's trade deficit rose nearly 10 per cent in May to 993.9 billion yen (nearly $10.5 billion) as rising costs for imports due to the cheaper yen matched a rebound in exports, the Ministry of Finance reported Wednesday.
Exports rose 10.1 per cent in May over a year earlier to 5.77 trillion yen ($60.7 billion) while imports also surged 10 per cent, to 6.76 trillion yen ($71.1 billion), the ministry said. Japan's trade deficit in May 2012 was 907.93 billion yen.
A weakening in the yen's value has pushed up costs for imports of crude oil, natural gas and other commodities for this resource scarce nation, but the deficit in May was bigger than most economists' estimates.
The figures show strong growth in exports to the U.S., China and the rest of Asia.
The deficit for May compared with a deficit of 879.9 billion yen ($8.6 billion) in April.
Japan's trade deficit rose to a record $83.4 billion in the fiscal year that ended in March, as imports climbed and a surge in exports to the U.S. failed to offset the impact from territorial tensions with China and weak demand from crisis-stricken Europe.
The yen has slid in value by more than 20 per cent against the U.S. dollar and euro, in turn pushing up other currencies in relative value. Its decline, due to expectations among market speculators and also monetary policies that are injecting huge sums of cash into the economy, has contributed to a recovery in exports. Stronger growth in the U.S. and some other major markets has also helped boost demand for Japanese products.
Exports to China rose 8.3 per cent in May from a year earlier to 1.05 trillion yen ($11 billion) while imports jumped 15 per cent to 1.46 trillion yen ($15.4 billion), leaving a deficit of 410 billion yen ($4.3 billion).
Japan's efforts to boost trade with the rest of Asia appeared to be yielding results, with exports rising 11 per cent to 3.2 trillion yen ($33.7 billion), as imports climbed nearly 10 per cent to 2.98 trillion yen ($31.4 billion).
Japan's trade surplus with the United States jumped 26 per cent over the year before to 427.1 billion yen ($4.5 billion). Exports surged 16.3 per cent year-on-year to 1.04 trillion yen ($10.9 billion) and imports rose 10 per cent to 614 billion yen ($6.5 billion). But exports to the EU fell 5 per cent, while imports jumped nearly 9 per cent, boosting Japan's deficit by nearly 650 per cent, to 88.7 billion yen ($933.7 million).
Imports from the Middle East, primarily of crude oil and gas, jumped 11.5 per cent from a year earlier to 1.23 trillion yen ($12.9 billion).
Japan's demand for natural gas has ballooned since most of its nuclear power plants remain closed following the March 2011 accident at the Fukushima Dai-ichi plant, and the deterioration in the trade balance is adding to pressure from the pro-nuclear government to restart more plants.