Japan's trade deficit roughly quadrupled to a record 21.73 trillion yen ($160 billion) in fiscal 2022 ended March, as increased energy costs and a weaker yen led imports to grow far more than exports, the Finance Ministry said Thursday.
Imports jumped 32.2 percent from a year earlier to 120.95 trillion yen, while exports increased 15.5 percent to 99.23 trillion yen. Japan remained in the red for a second straight year, with both figures the highest since comparable data became available in fiscal 1979.
The trade deficit of 13.76 trillion yen registered in fiscal 2013 was previously the highest.
Crude oil, coal and liquefied natural gas were among the major items that contributed to the surge in imports.
With the waning of the negative impact of the COVID-19 pandemic, strong overseas demand supported exports of cars, iron and steel, and other items.
The dollar averaged 135.05 yen in fiscal 2022, sharply up from 111.91 yen in the previous year. The yen's rapid deprecation last year added to the pain for resource-scarce Japan by inflating the import costs.
Japan had a trade surplus of 6.65 trillion with the United States but ran a record deficit of 6.81 trillion yen with China.
The U.S. Federal Reserve has been aggressively raising interest rates to tamp surging inflation, raising concern that it could slow economic growth and reduce shipments from Japan.
While the end of Beijing's "zero-COVID" policy was viewed as positive for Japan's exports, concern about China's slow growth remains.
In fiscal 2022, exports to the United States jumped 21.3 percent to a record 18.70 trillion yen, helped by auto demand, while imports from the country grew 26.8 percent to 12.05 trillion yen, also a record, with medicine and coal among major items.
Imports from China increased 19.6 percent to a record 25.33 trillion yen as demand for smartphones, clothing and audio-related parts was strong. Exports to the country, meanwhile, rose 1.3 percent to 18.51 trillion yen, also a record, helped by audiovisual equipment, semiconductors and other electronic parts.
Japan's trade deficit with the European Union stood at 1.77 trillion yen, the 11th straight year of red ink, while the nation eked out a trade surplus of 454.24 billion yen with the rest of Asia, including China, the ministry data showed.
"China-bound exports are expected to recover after struggling during the Lunar New Year holidays (in late January), but demand from the United States and Europe is getting weaker," said Kota Suzuki, an economist at Daiwa Securities.
"The value of imports is unlikely to drop sharply, given recent gains in crude oil prices and the weaker yen. So the trade deficit will narrow but only at a moderate pace," Suzuki said.
For March alone, Japan recorded a trade deficit of 754.51 billion yen, after imports grew 7.3 percent and exports increased 4.3 percent.