Japan’s trade deficit narrowed to JPY 1.31 trillion in January 2020 from JPY 1.42 trillion in the same month a year earlier. It marked the third straight month of trade deficit, as exports fell 2.6% year-on-year to JPY 5.43 trillion, the lowest value in three years mainly due to lower shipments of cars and machines to the US and sales of car parts and electronics to China. Imports shrank 3.6% to JPY 6.74 trillion.

New year holidays in Japan and China were one of the factors behind the fall in exports in January while the ongoing coronavirus outbreak is likely to affect exports in the coming months. Purchases fell from China (-5.7%), Hong Kong (-42.4%), South Korea (-5%), the US (-11.5%), Australia (-17.1%) and Western Europe (-2.2%), mainly Germany (-9.1%) and the UK (-7%). In contrast, purchases rose from Taiwan (2%), Singapore (9.6%), Thailand (2.7%) and the Middle East (8.3%), particularly UAE (10%).