Japan Trade Deficit:

 Article Source:  https://mainichi.jp/english/articles/20220316/p2g/00m/0bu/031000c

Article:

TOKYO (Kyodo) -- Japan posted a goods trade deficit of 668.3 billion yen ($5.6 billion) in February, logging red ink for the seventh consecutive month as the cost of energy imports continued to grow, the Finance Ministry said Wednesday.

Imports grew 34.0 percent from a year earlier to 7.9 trillion yen, rising for the 13th consecutive month, the ministry said in a preliminary report, as purchases of crude oil especially from the United Arab Emirates and liquefied natural gas from Australia were more expensive.

Ideas:

Japan most likely for the time being is going to have a trade deficit until either the energy markets can stabilize and or until the Japanease yen can get back to a weak zone that is beneficial to the overall economy.

The Ukraine/Russia situation has not helped and Japan is in no position to be able to join the EU in boycotting Russian oil at this time.

Part of the problem is that Japan, at the moment, has too few energy resources other than to import coal, gas, and oil as Japan essentially abanded nucleur power after 2011, which in itself is a very efficient fuel source, despite the challenges of 2011.

Global energy suppliers watch very carefully what is happening in all energy markets globally and if the price of oil and gas is going up in other markets or suppliers then those other suppliers are going to do the same thing.

As a result there is no cheap energy sources and Japan has to pay whatever the market charges. And then of cousre add in the weak Japanese yen and the price of energy in Japan gets even higher.

Article:

Crude oil imports jumped 93.2 percent to 808.6 billion yen, up for the 11th straight month, also on the back of the yen's depreciation against major currencies and Russia's invasion of Ukraine.

But a ministry official said it was difficult to tell how much the preliminary report reflected the impact of the invasion on import costs as Russia's assault began on Feb. 24.

"We will look closely at the impact of the Ukraine crisis on the Japanese economy," the official added.

Ideas:

In many cases countries might buy patches of energy months in advance on maybe the futures market at the price for that day. So even if they bought energy from Russia in January or February, and at that time paid a certain, to be deliverd maybe in May, that means whatever has happened since that time doesn't change the price they paid for January, when its delivered in March or April

But even in January and beyond the price of oil and gas had been going up steadily which has put a strain on the Japanese economy and now most likely companies that use a lot of gas and oil now have to pay even more and they might or might not pass on the costs to the next in the supply chain.

Article:

Exports rose 19.1 percent to 7.2 trillion yen, up for the 12th straight month, driven by robust demand for light oil in Australia. Iron and steel product shipments to South Korea and auto exports to the United States also contributed to the increase.

All figures were compiled on a customs-cleared basis.

Ideas:

Like South Korean, Japan is a major oil refiner meaning the process crude oil and ship it out as an export to other countries like Australia.

The iron and still exports to South Korea are most likely going to the large ship manufacturing companies located on the east coast of South Kore along the the large car manufacturers in the same area.

As South Korea recently elected a pro-business presidential candidate, it will be interesting to see if Japanese businesses and South Korean businesses start to work more closely together, despite having very similar industries and exports products, which makes them competitors in many areas.

Have a nice day and be safe!