Weak yen fails to boost exports as Japan logs trade deficit

TOKYO, Sept 18 (AFP): Japan posted Thursday its 26th consecutive monthly trade deficit, as a sharply weaker yen failed to lift exports as the world's number three economy stalls.
Despite narrowing marginally from a year earlier, Japan's August trade shortfall underscored a mixed picture for exports to key markets including China and the United States, as well as slowing activity at home following April's sales tax hike.
The yen's sharp fall since Prime Minister Shinzo Abe launched his pro-spending stimulus policy in late 2012 has not translated into a clear pick-up in exports as Japanese companies shift production to lower-cost venues abroad.
The finance ministry data showed that Japan's August trade deficit came in at 948.5 billion yen ($8.7 billion) against a shortfall of 971.4 billion yen a year ago.
The narrowing was partly due to a 1.5 per cent decline in imports to 6.65 trillion yen as the bill for foreign oil and coal shipments fell.
Japan's fossil fuel imports soared after the 2011 Fukushima nuclear crisis forced the shuttering of nuclear reactors that once supplied more than a quarter of the country's power.
Part of the energy import downturn was caused by poor summer weather, which translated into lower electricity demand to power air conditioners and other cooling products.
Buying of foreign telecoms equipment also fell, which was attributed to inventory reductions ahead of the launch of Apple's new iPhone in key markets, including Japan, this week.
Exports fell 1.3 per cent to 5.71 trillion yen as demand for chemical products and cars in the United States.
Japan's economy contracted 1.8 per cent on-quarter in the three months to June-or 7.1 per cent on an annualised basis-its steepest quarterly drop since the 2011 quake and tsunami disaster.
Japan has been hit by lacklustre economic data since sales tax was raised to 8.0 per cent from 5.0 per cent on April 1 to help pay alleviate of the world's heaviest public debt burdens.
The decline has heaped pressure on the Bank of Japan to unleash fresh monetary easing measures, as Tokyo mulls a second tax hike to 10 per cent next year.