Japan faced with a current account deficit in December for the first item in one and half year amid surging imported fuel costs, according to official data on Tuesday.
The data undermines shift in Japan’s economic structure from country that was knowns for export of goods to one that is vulnerable to swings in raw materials costs due to its increasing reliance on energy and food imports.
The country’s economy ran a current account deficit of 370.8 billion yen ($3.2 billion) in December, government data showed undermining market forecasts for a 73.5 billion yen surplus. It was the first deficit since June 2020.
Rising fuel costs drove up the value of imports by 44.8% in December from a year earlier, outpacing a 18.7% rise in exports and pushing the trade balance into a 318.7-billion-yen deficit.
“The demerits of a weak yen is that it pushes up the import cost of energy and food, thereby increasing households’ burden as well as material costs of corporates,” Japan’s top currency diplomat Masato Kanda recently told Reuters.
