Tokyo (AsiaNews/Agencies) – Japan’s trade deficit was 471.42 billion yen (US$ 5.7 billion) in January, Ministry of Finance data have shown. This is the first time in 22 months and exports, which grew by only 1.4 per cent, are to blame. Experts had expected export growth to be closer to 7 per cent. However, they are still optimistic and believe the country can recover from the economic crisis through greater exports, albeit at a lower rate.

“The slowdown in Japan's export growth in January is temporary and exports could continue as final demand overseas is still strong and the inventory cycle suggests there is more demand,” said Takahide Kiuchi, from Nomura Securities.

The trade deficit should thus remain a one-time thing. For most economists, a slowdown in exports to Asia is the cause. Shipments to Asian markets rose in fact only 0.4 per cent last month, far less than the 14.8 per cent annual increase in December.

Lower demand in China, Japan’s main trading partner, is the main factor. In January, exports to China increased 1 per cent, down from a 20.1 per cent annual increase in December.

Beijing is battling high inflation and has taken steps to slow spending. It has also cut tax breaks on cars in December.

Data are however contradictory and closely tied to the value of the yen. The trade surplus in January with the United States rose 21.7 per cent on year, whilst the surplus with the European Union shrank by 31.3 per cent on year.

Exports to the United States rose an annual 6.0 per cent but declined 0.7 per cent on year to the European Union.

At the same time, overall imports came in much higher than expected, to 12.4 per cent on year. Imports from Asia rose 14.0 per cent on year, whilst imports from China alone climbed an annual 17.2 per cent.

The cost of transportation, real estate and rents also experienced a small decline in January.