Japan July trade deficit soars

Japan, hit by the European debt crisis that has slowed its exports, Wednesday reported a record July trade deficit of 517.4 billion yen or $6.53 billion. Japan's export-reliant economy, the third-largest economy in the world after the United States and China, had a small trade surplus of 61.7 billion or $789 million in June. In announcing the latest numbers, the Finance Ministry said July exports shrank 8.1 percent year-on-year to 5,313.3 billion yen or $67 billion. It was the second straight month of decline, weighed down by those destined for Europe and Asia, Kyodo News reported. July imports grew 2.1 percent to 5,830.7 billion yen or $73.5 billion. The country's trade deficit in the first half of this year hit a record 2.916 trillion yen or $37 billion, blamed on rising energy imports. Despite the small surplus in June, economists have said they expect the entire year to end in deficit. The Japanese economy has been affected by a stronger yen, which makes its exports more expensive, and growing demand for energy after closure of nuclear plants in the wake of the earthquake and tsunami in March 2011.