Japan posts record first-half trade deficit

Japan Wednesday posted a record trade deficit of about $37.3 billion in the first half of the year as soaring energy costs weighed on the world's third-largest economy and key European exports slumped. The finance ministry said the country saw a shortfall of about 2.9 trillion yen ($37.3 billion) in the first six months of 2012. The huge trade deficit stemmed largely from energy costs, with the resource-poor nation seeing a nearly 50 percent jump in purchases of liquefied natural gas and a 16 percent increase in crude oil, the data showed. Japan has struggled to meet its energy needs and turned to pricey fossil fuel alternatives after its nuclear reactors were switched off in the wake of last year's atomic crisis at the Fukushima Daiichi plant. "Japan's trade balance continues to show a trend of weak exports and extreme sensitivity to import prices, such as those of crude oil," RBS Securities chief Japan economist Junko Nishioka told Dow Jones Newswires. "The crisis in Europe is posing a growing risk to Japan's economic recovery scenario." Japan's trade surplus with the European Union during the first half was the lowest on record, according to the ministry. However the month of June alone offered a brighter picture with Japan posting a better-than-expected trade surplus of 61.7 billion yen instead of the market forecast for a 135 billion yen deficit, the official data showed. It was the first surplus in four months, with the exports of vehicles and auto parts rising, the data showed.