Japanese prime minister Shinzo Abe’s “shock and awe” tactics to revive the world’s third-biggest economy paid off in May with the biggest rise in exports since 2010, figures showed today.
The weaker yen — driven lower by a massive acceleration of the Bank of Japan’s money-printing programme to hit a new 2% inflation target — helped shipments jump 10.1% year on year to 5.8 trillion yen (£39 billion).
But the currency’s tumble — more than 20% against the dollar and the euro — also sent the cost of imports soaring for the resource-scarce nation, increasing the trade deficit by 10%, official figures showed.
Japan’s dependence on imports such as natural gas has ballooned since because most of its nuclear power plants remain closed in the wake of March 2011’s tsunami, which triggered an explosion at its Fukushima plant.
This has put pressure on the country’s trade balance. Imports from the Middle East, primarily of crude oil and gas, were last month up 11.5% on a year earlier.
Although exports to the US — where stronger growth is helping demand for Japanese products — surged 16% and Chinese exports were up 8%, relations with China remain tense because of a diplomatic row over disputed islands. Eurozone markets also remain weak.
Abe is looking to boost public spending as well as implement structural reforms alongside monetary policy action as his “three arrows” to kick-start growth.
