Soaring fuel prices along with weakening yen have sent import costs surging
A perfect storm created by growing commodity prices and a weakening national currency sent Japanese import costs soaring in 2022, with the trade deficit hitting a record high of 19.97 trillion yen ($155 billion), Nikkei reported, citing officials statistics.
According to preliminary data tracked by the country's ministry of finance, growth in Japan's exports amounted to 98.18 trillion yen ($764 billion) last year, marking a surge of 18%. At the same time, imports reportedly soared by more than 39% and totaled 118.15 trillion yen ($920 billion).
The estimated annual deficit, recorded for a second consecutive year, was much higher in comparison with the previous peak of 12.8 trillion yen ($100 billion) logged in 2014.
In 2022, the value of crude oil imported by the resource-poor nation saw an enormous growth of 91.5%, while liquefied natural gas imports skyrocketed by 97.5%. The unprecedented surge came as global energy prices soared after the US and the EU, along with their allies and Japan, imposed sanctions on Russia, one of the world's major energy producers and exporters, after Moscow launched its military operation in Ukraine.
"Imports increased 39.2% due to an increase in [prices of] crude oil, coal and other products," the ministry said.
Moreover, the yen dropped to a 32-year low against the dollar in October as the Bank of Japan kept its ultra-mild monetary policy amid global rate hikes, added to import costs for vital produce like food and raw materials.
The surge in Japanese exports is attributed to the recovery from the coronavirus pandemic in 2022. Foreign sales of the country's vehicles grew 21.4% on the year, while steel exports increased 24.2%.
The ministry noted that exports to China increased just 5.7%, slower than sales to the US and the EU, due to Beijing's prolonged "zero-Covid" policy.
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