Japan’s exports jump 17% in May, but it logs a deficit as imports surge

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Category: Business

Listening

Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. trade deficit / treɪd ˈdɛf ə sɪt / (n.) – a situation in which a country buys more goods and services from other countries than it sells to them
    Example:

    The government is trying to reduce the trade deficit by encouraging local businesses to sell more products overseas.


  2. diversify / daɪˈvɜr səˌfaɪ / (v.) – to change something by adding more variety
    Example:

    The company needs to diversify its products to attract different kinds of customers.


  3. supplier / səˈplaɪ ɚ / (n.) – a person or company that provides goods, materials, or services to another business or organization, usually over a long period of time
    Example:

    To get the best prices, the supermarket buys its fresh fruit from a local supplier.


  4. plunge / plʌndʒ / (v.) – to fall, drop, or decrease in value, amount, or level very suddenly and quickly
    Example:

    House prices plunged last year, making it much easier for young people to buy their first home.


  5. benchmark / ˈbɛntʃˌmɑrk / (adj.) – describing something used as a main example, rule, or model to check, measure, or compare other similar things
    Example:

    The central bank reduced its benchmark interest rate to help local businesses borrow money more easily.


Article

Read the text below.

Japan recorded a trade deficit in May, the first in four months, as imports of electrical machinery surged, helping to offset a jump in exports, the Finance Ministry reported.


Preliminary data showed Japan’s exports rose 17% in May from the same month last year to 9.51 trillion yen ($59.4 billion), while imports rose 12.5% to 9.89 trillion yen ($61.8 billion). That left a deficit of 378.6 billion yen ($2.4 billion), down from a surplus of 301.9 billion yen ($1.9 billion) in April.


Oil and gas imports fell 1.8% year-on-year due to the Iran war and the blockade of the Strait of Hormuz.


A fifth of the world’s oil passed through the Strait until February 28, when the U.S. and Israel began attacking Iran. Japan has sought to diversify its suppliers.


Imports of electrical machinery jumped 31.5% as the boom in artificial intelligence generated strong demand for computer chips and other components.


Higher prices have also pushed the value of both exports and imports higher. Japan exported fewer vehicles in May, but the value of those shipments rose more than 13%. While imports of oil fell 28.5% in value, they plunged 57.3% in volume.


The weak yen was also a factor in boosting imports. The U.S. dollar has been trading at about 160 Japanese yen lately. A year ago, it was at 140 yen levels.


The Bank of Japan raised its benchmark interest rate to 1.0% on June 16, the first time since 1995 that the rate has been at that level. It cited inflation as a key concern.


So far, the rate hike has not had a noticeable effect on the yen’s value.


This article was provided by The Associated Press.


Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

  • The article states that due to the Iran war and the blockade of the Strait of Hormuz, Japan has sought to diversify its suppliers. In your opinion, is it smart for a country to quickly look for new global partners during a crisis, or does this quick change create bad relationships with long-term partners? Why do you think so? Discuss.
  • If you own a business, would you prefer to stay loyal to one partner or supplier who is facing temporary trouble, or would you immediately look for a different partner or supplier to protect your business? Why do you say so? In your opinion, how should business owners protect their companies from problems caused by issues with their suppliers? Discuss.

Discussion B

  • The article states that a boom in artificial intelligence has generated a strong demand for computer chips and other components. Do you feel that this boom in AI has genuinely helped your country? Why or why not? Discuss.
  • Buying computer chips and other components for AI abroad is expensive. Do you think it is worth it for a country to spend more money to keep up with the latest technology? Why or why not? Discuss.