Japan has racked up a trade deficit for the 21st month in a row despite exports gradually rebounding. According to data released by the Ministry of Finance, Japan’s balance of payments showed an 876 billion yen ($8.13 billion) deficit in April, compared with a surplus of 1 trillion yen during the same period last year.
Exports rose 4% from April 2019 due to increased shipments of cars and semiconductor manufacturing equipment but imports surged 10%, driven by higher prices for oil and liquefied natural gas (LNG). The surge in imports was mainly attributed to rising fuel costs as well as strong demand from China, which is recovering faster than other countries from coronavirus pandemic-induced recessionary pressures.
The Japanese government is taking measures, such as reducing tariffs on certain imported goods and promoting free trade agreements with other nations to reduce its reliance on foreign markets while boosting domestic production capacity. It also plans to introduce more flexible labor regulations that would make it easier for companies operating within Japan’s borders to hire workers overseas or use robots instead of humans when necessary, which could help reduce costs associated with importing materials or services into Japan while increasing competitiveness among local businesses at home and abroad alike.