The decline of the US dollar against the yen depressed Japan’s trade deficit with Gulf Arab oil producers by nearly $3 billion in 2007 after a steady growth in most years over the past three decades, official figures showed.
From around $80.3bn in 2006, the gap in Japan’s trade balance with the six-nation Gulf Co-operation Council (GCC) receded to $77.7bn in 2007, showed the figures by the Japan External Trade Organisation (JETRO).
The decline followed a surge of nearly 37 per cent in Japan’s exports to the GCC last year and experts cited the low dollar as the main factor.
“It is clear that this sharp rise in Japan’s exports to the region in just one year was a result of higher prices of its products due to the decline in GCC’s currencies which are tied to the dollar,” a Riyadh-based economist said.
JETRO’s figures, published this week, showed Japan’s exports to all GCC members recorded sharp growth, with those to Oman leaping by around 45.8 per cent. The exports jumped by 44.6 per cent to Saudi Arabia, nearly 40 per cent to the Kuwait, 32.9 per cent to the UAE, 26.2 per cent to Bahrain and about 14.3 per cent to Qatar.
Its imports recorded modest increases from some members and declines in others despite the surge in average crude prices by nearly $8 last year.
The report showed the imports from Saudi Arabia and Bahrain fell by 4.5 per cent and 20.1 per cent respectively while they grew by 12.1 per cent from Kuwait, 14.3 per cent from Qatar and 2.8 per cent from the UAE. Japan’s imports from Oman jumped by 33.8 per cent despite a sharp fall in its crude imports from the Sultanate. Industry sources said the surge was caused by higher Omani LNG exports to Japan.
The report showed Japan’s total exports to the GCC surged to an all-time high of around $21.45bn in 2007 from $15.60bn in 2006 while imports swelled to nearly $99.15bn from $95.9bn.
Japan’s exports to the GCC include mainly vehicles, watches, heavy equipment and machinery, and electrical appliances – most of which have recorded prices increases over the past year. Its imports include mostly crude oil and the surge in oil prices over the past five years has widened its commercial deficit sharply with the region compared with the previous five-year period. Saudi Arabia was the largest exporter to Japan in 2007 while the UAE was the top importer.
The figures showed Japan recorded its highest trade deficit with Saudi Arabia, standing at $28.8bn in 2007. The deficit was around $24.4bn with the UAE, $15.09bn with Qatar, $8.5bn with Kuwait, around $1.05bn with Oman and nearly $246m with Bahrain.
Japan is the region’s top trade, accounting for more than a quarter of their total trade. Two-way commercial exchange of around $121bn last year also rose by nine per cent of Japans’ total foreign trade of nearly $1.32 trillion, according to JETRO.
Low dollar narrows Japan’s trade deficit