Japan’s trade deficit widened to beyond the 1 trillion yen mark for the first time since January, coming in at 1.1 trillion yen ($7.1 billion). <\/p>\n
Oil prices remained high, pushing up Japan’s energy import bill as the Iran war drags on. Japan meets over 87% of its energy needs via imports, according to the International Energy Agency.<\/a><\/p>\n Petroleum imports jumped 58.7% by value. Most notably, petroleum imports from the U.S. skyrocketed 1,026% year on year.<\/p>\n This could be because Tokyo has been replacing oil imports from the Middle East with American supplies, but paying a premium for them, Marcel Theliant, head of Asia-Pacific at Capital Economics, wrote in a note after the data release.<\/p>\n He noted Japan’s average oil import price was $103 per barrel in August, which was above the average $94 for Brent in August.<\/p>\n “Japan has replaced crude oil imports from the Middle East with imports from the US in recent months, but the average price of the latter was $110 [per barrel] last month,” he added.<\/p>\n Japan is therefore still paying a premium to secure sufficient crude oil supplies from sources outside of the Middle East, though the government’s price caps on refined petroleum products means that this cost is largely borne by the government rather than households and firms.<\/p>\n