Japan’s Trade Balance in August

Japan’s trade balance in August showed a deficit of 695.3 billion yen ($4.93 billion), which was smaller than the anticipated 1.380 trillion yen. However, this figure widened from July's deficit of 628.7 billion yen.

Export Growth

Exports grew by 5.6% year-on-year but fell short of the expected 10%. This was a slowdown from a 10.2% increase the previous month. Factors affecting exports included a stronger yen and a hawkish Bank of Japan, alongside expectations of U.S. interest rate cuts.

Import Figures

In contrast, imports increased by only 2.3%, far below the 13.4% expected, and a notable decrease from the previous month's 16.6% increase. This raises concerns regarding the extent of local demand growth driven by rising wages, especially given Japan's ongoing deflationary trend over the last two years.