TOKYO -- Japan's trade deficit ballooned to a record 12.8 trillion yen ($109 billion) last year as a weakening yen pushed the cost of imports higher despite a moderate recovery in exports.
Preliminary data from the Finance Ministry released Monday showed Japan's exports rose 4.8 per cent to 73.1 trillion yen ($620 billion) in 2014 while imports climbed 5.7 per cent to 85.9 trillion yen ($763.7 billion). The trade deficit rose by 11.4 per cent from the 11.5 trillion yen ($97.7 billion) gap in 2013.
The data show exports rising nearly twice as fast in the latter half of the year than in the first half, while the increase in imports fell sharply, suggesting the deficit will narrow in coming months.
The Japanese yen has weakened over the past year to about 117 yen to the dollar compared with about 100 yen in early 2014. That raises the value of Japan's exports in yen terms. But it also pushes up costs for imports of fuel and food.
The full impact of the more than 60 per cent plunge in oil prices was not fully reflected in the most recent data, said Marcel Thieliant of Capital Economics.
"Lower energy prices may briefly return the trade balance to surplus in coming months, before a weaker yen and a rebound in the oil price push it back into deficit," Thieliant said in a commentary.
But Thielient said exports may slow in coming months.
Japan's exports of vehicles, a major component of its total overseas business, fell 1.4 per cent in volume terms in 2014 from a year earlier, though the value rose nearly 15 per cent to 10.9 trillion yen ($92.6 billion).
