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Japan marks first trade deficit in 5 years

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TOKYO, Feb 23 (Reuters) Japan logged a monthly trade deficit for the first time in five years in January as high oil prices boosted imports and the Lunar New Year dampened shipments to Asia, now Japan's largest export market.

Japan's trade balance fell to a deficit of 348.9 billion yen ( TOKYO, Feb 23 (Reuters) Japan logged a monthly trade deficit for the first time in five years in January as high oil prices boosted imports and the Lunar New Year dampened shipments to Asia, now Japan's largest export market.

Japan's trade balance fell to a deficit of 348.9 billion yen ( TOKYO, Feb 23 (Reuters) Japan logged a monthly trade deficit for the first time in five years in January as high oil prices boosted imports and the Lunar New Year dampened shipments to Asia, now Japan's largest export market.

Japan's trade balance fell to a deficit of 348.9 billion yen ( TOKYO, Feb 23 (Reuters) Japan logged a monthly trade deficit for the first time in five years in January as high oil prices boosted imports and the Lunar New Year dampened shipments to Asia, now Japan's largest export market.

Japan's trade balance fell to a deficit of 348.9 billion yen ($2.95 billion) in January from a surplus of 914.0 billion yen in December, Ministry of Finance data showed on Thursday. That compared with a consensus forecast of a 100 billion yen deficit.

While Japan's economic growth in the October-December quarter of an annualised 5.5 percent was partly due to a pickup in net exports -- or exports minus imports -- economists said the January deficit was an aberration and no cause for concern.

''Exports were a little on the weak side , but I think the Lunar New Year in Asia had a big impact on that,'' said Yoshiki Shinke, a senior economist at Dai-ichi Life Research Institute.

''There are also a lot of special circumstances during the month, so I don't think it is necessary to worry that Japanese exports have hit an obstacle, or that the economy won't improve.'' Exports rose 13.5 percent from a year earlier to 5.01 trillion yen, while imports rose 27.0 percent to 5.36 trillion yen.

Exports to Asia rose a meagre 5.1 percent, with those to China up 5.4 percent, while exports to the United States and Europe grew 21.7 percent and 14.8 percent respectively.

Seasonally adjusted, the trade balance was a surplus of 572.26 billion yen, down from 587.86 billion yen in December.

Even if persistently high oil prices continue to pressure Japan's trade balance in the months ahead, healthy domestic demand is expected to underpin economic growth.

The Ministry of Economy, Trade and Industry said its tertiary sector index, which gauges activity in the broadly defined services industry, rose 0.2 percent in December from the previous month to mark its highest level on record.

Economists' forecasts had centred on a rise of 0.3 percent.

The all-industries index, which covers a broader range of economic activity and includes the tertiary index, rose 0.4 percent from the previous month, also scaling a record high.

Separately, the Bank of Japan said its domestic corporate services price index (CSPI) fell 0.8 percent in January from the previous month.

The CSPI, which tracks prices of business-to-business services, was down 0.1 percent from a year earlier.

Although Japan's core consumer price index (CPI) rose for the second straight month in December, fuelling expectations that the BOJ would scrap its ultra-easy monetary policy in the coming months, critics of the central bank have pointed to a lag in service prices as a reason not to change policy in haste.

REUTERS PDS VP0712 .95 billion) in January from a surplus of 914.0 billion yen in December, Ministry of Finance data showed on Thursday. That compared with a consensus forecast of a 100 billion yen deficit.

While Japan's economic growth in the October-December quarter of an annualised 5.5 percent was partly due to a pickup in net exports -- or exports minus imports -- economists said the January deficit was an aberration and no cause for concern.

''Exports were a little on the weak side , but I think the Lunar New Year in Asia had a big impact on that,'' said Yoshiki Shinke, a senior economist at Dai-ichi Life Research Institute.

''There are also a lot of special circumstances during the month, so I don't think it is necessary to worry that Japanese exports have hit an obstacle, or that the economy won't improve.'' Exports rose 13.5 percent from a year earlier to 5.01 trillion yen, while imports rose 27.0 percent to 5.36 trillion yen.

Exports to Asia rose a meagre 5.1 percent, with those to China up 5.4 percent, while exports to the United States and Europe grew 21.7 percent and 14.8 percent respectively.

Seasonally adjusted, the trade balance was a surplus of 572.26 billion yen, down from 587.86 billion yen in December.

Even if persistently high oil prices continue to pressure Japan's trade balance in the months ahead, healthy domestic demand is expected to underpin economic growth.

The Ministry of Economy, Trade and Industry said its tertiary sector index, which gauges activity in the broadly defined services industry, rose 0.2 percent in December from the previous month to mark its highest level on record.

Economists' forecasts had centred on a rise of 0.3 percent.

The all-industries index, which covers a broader range of economic activity and includes the tertiary index, rose 0.4 percent from the previous month, also scaling a record high.

Separately, the Bank of Japan said its domestic corporate services price index (CSPI) fell 0.8 percent in January from the previous month.

The CSPI, which tracks prices of business-to-business services, was down 0.1 percent from a year earlier.

Although Japan's core consumer price index (CPI) rose for the second straight month in December, fuelling expectations that the BOJ would scrap its ultra-easy monetary policy in the coming months, critics of the central bank have pointed to a lag in service prices as a reason not to change policy in haste.

REUTERS PDS VP0712 .95 billion) in January from a surplus of 914.0 billion yen in December, Ministry of Finance data showed on Thursday. That compared with a consensus forecast of a 100 billion yen deficit.

While Japan's economic growth in the October-December quarter of an annualised 5.5 percent was partly due to a pickup in net exports -- or exports minus imports -- economists said the January deficit was an aberration and no cause for concern.

''Exports were a little on the weak side , but I think the Lunar New Year in Asia had a big impact on that,'' said Yoshiki Shinke, a senior economist at Dai-ichi Life Research Institute.

''There are also a lot of special circumstances during the month, so I don't think it is necessary to worry that Japanese exports have hit an obstacle, or that the economy won't improve.'' Exports rose 13.5 percent from a year earlier to 5.01 trillion yen, while imports rose 27.0 percent to 5.36 trillion yen.

Exports to Asia rose a meagre 5.1 percent, with those to China up 5.4 percent, while exports to the United States and Europe grew 21.7 percent and 14.8 percent respectively.

Seasonally adjusted, the trade balance was a surplus of 572.26 billion yen, down from 587.86 billion yen in December.

Even if persistently high oil prices continue to pressure Japan's trade balance in the months ahead, healthy domestic demand is expected to underpin economic growth.

The Ministry of Economy, Trade and Industry said its tertiary sector index, which gauges activity in the broadly defined services industry, rose 0.2 percent in December from the previous month to mark its highest level on record.

Economists' forecasts had centred on a rise of 0.3 percent.

The all-industries index, which covers a broader range of economic activity and includes the tertiary index, rose 0.4 percent from the previous month, also scaling a record high.

Separately, the Bank of Japan said its domestic corporate services price index (CSPI) fell 0.8 percent in January from the previous month.

The CSPI, which tracks prices of business-to-business services, was down 0.1 percent from a year earlier.

Although Japan's core consumer price index (CPI) rose for the second straight month in December, fuelling expectations that the BOJ would scrap its ultra-easy monetary policy in the coming months, critics of the central bank have pointed to a lag in service prices as a reason not to change policy in haste.

REUTERS PDS VP0712 .95 billion) in January from a surplus of 914.0 billion yen in December, Ministry of Finance data showed on Thursday. That compared with a consensus forecast of a 100 billion yen deficit.

While Japan's economic growth in the October-December quarter of an annualised 5.5 percent was partly due to a pickup in net exports -- or exports minus imports -- economists said the January deficit was an aberration and no cause for concern.

''Exports were a little on the weak side , but I think the Lunar New Year in Asia had a big impact on that,'' said Yoshiki Shinke, a senior economist at Dai-ichi Life Research Institute.

''There are also a lot of special circumstances during the month, so I don't think it is necessary to worry that Japanese exports have hit an obstacle, or that the economy won't improve.'' Exports rose 13.5 percent from a year earlier to 5.01 trillion yen, while imports rose 27.0 percent to 5.36 trillion yen.

Exports to Asia rose a meagre 5.1 percent, with those to China up 5.4 percent, while exports to the United States and Europe grew 21.7 percent and 14.8 percent respectively.

Seasonally adjusted, the trade balance was a surplus of 572.26 billion yen, down from 587.86 billion yen in December.

Even if persistently high oil prices continue to pressure Japan's trade balance in the months ahead, healthy domestic demand is expected to underpin economic growth.

The Ministry of Economy, Trade and Industry said its tertiary sector index, which gauges activity in the broadly defined services industry, rose 0.2 percent in December from the previous month to mark its highest level on record.

Economists' forecasts had centred on a rise of 0.3 percent.

The all-industries index, which covers a broader range of economic activity and includes the tertiary index, rose 0.4 percent from the previous month, also scaling a record high.

Separately, the Bank of Japan said its domestic corporate services price index (CSPI) fell 0.8 percent in January from the previous month.

The CSPI, which tracks prices of business-to-business services, was down 0.1 percent from a year earlier.

Although Japan's core consumer price index (CPI) rose for the second straight month in December, fuelling expectations that the BOJ would scrap its ultra-easy monetary policy in the coming months, critics of the central bank have pointed to a lag in service prices as a reason not to change policy in haste.

REUTERS PDS VP0712

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