TOKYO Japan likely recorded its biggest trade deficit in more than nine years in August, as the yen's plunge to 24 year-lows swelled import costs, a Reuters poll showed on Friday.
The yen slump has triggered a series of verbal warnings from Japanese policymakers this week, while economists have said that the currency depreciation could push Japan's core inflation to around 3 per cent by the end of the year, squeezing households' purchasing power.
The trade balance in August likely ended in a deficit of 2.398 trillion yen $16.80 billion because a 46.7 per cent surge in imports outstripped a 23.6 per cent rise in exports, the economists' median estimate in the poll shows.
Since January 2014, the expected shortfall would be the biggest monthly record since the 2.790 trillion yen deficit.
Kenta Suwa, economist at Mizuho Research and Technologies said that while the rise in crude oil prices stalled after July, the yen's decline pushed up the cost of imports.
The world's third-largest economy grew by an annualised 3.5 per cent in April-June on robust household and business spending thanks to the easing of COVID 19 curbs, revised gross domestic product data showed on Thursday.
However, analysts are not as optimistic for Japan's growth outlook due to the risks of inflation and the weakening global economy.
The survey showed that Japan's annual wholesale inflation reached 8.9 per cent in August, up from 8.6 per cent in July, which is a sign that firms are facing relentless price pressures that are squeezing profits.
The core machinery orders, which are a leading indicator of business spending, were expected to drop 0.8 per cent month-on-month in July, after a 0.9 per cent increase in June, according to the poll.
The trade figures will be released on Sept. 15:50 a.m., Sept. 14 and the machinery orders data at 8: 50 a.m. on Sept. 14th, GMT, Sept. 13 The Bank of Japan will release wholesale price data at 8: 50 a.m. on Sept. 13 2350 GMT, Sept. 12