Japan Posts 2.81 Trillion Yen Fiscal H1 Trade Deficit as Middle East Conflict Drives Oil Import Costs

Japan recorded a trade deficit of 2.81 trillion yen ($17.8 billion) for the April-September fiscal half, the Finance Ministry said Wednesday, as conflict in the Middle East pushed oil import prices sharply higher. Exports for the period rose 18.4% year-over-year to a record 63.5 trillion yen, while imports climbed 20.4% to 66.3 trillion yen, also a record. Resource-poor Japan imports virtually all its oil and has depended on access to the Strait of Hormuz, which is now effectively blocked, forcing costlier shipments via alternative routes. Brent crude has risen from $70 a barrel in February to roughly $100 lately, after exceeding $110 in recent months. September alone posted a 536.6 billion yen deficit, the fifth straight monthly shortfall but down from 1.1 trillion yen in August. Imports rose 18.9% and exports 16.7% for the month. A weakening yen near the 150-per-dollar level is inflating import costs. The Bank of Japan, which raised its benchmark rate to 1.25% last month, a 31-year high, meets again next week.