Japan recorded a trade deficit of 19,966 billion yen in 2022, due to increased imports of oil and coal, partially offset by increased exports of automobiles and mineral fuels, according to the Ministry of Finance.

However, potential disruptions to international trade from the Russia–Ukraine conflict on exports, imports and the overall trade balance are highly uncertain.

Of course, Japan is one of the world’s leading trading nations, ranking fifth after China, the United States, Germany and the Netherlands in merchandise exports and fifth after the United States, China, Germany and the Netherlands in merchandise imports among International Monetary Fund (IMF) member countries in 2022.

In 2021, Japan had a trade deficit of 1,784 trillion yen due to an increase in imports, including crude oil and non-ferrous metals, which was partially offset by an increase in exports, including steel and auto parts.

Trade deficit

Recently, the global economy has been affected by Russia’s large-scale military activity against Ukraine initiated in February 2022 and the related economic sanctions imposed on certain Russian entities and individuals by many major countries.

In particular, financial and commodity markets have experienced significant volatility and energy prices have risen sharply due primarily to concerns about disruptions in oil and natural gas supplies.

Driven in part by rising energy and commodity prices, there has been a significant inflationary trend in consumer prices in many major economies, including Japan, and monetary authorities in some economies have tightened monetary policy in response to this trend.

Depending on how the conflict develops and any additional economic sanctions imposed on Russia, as well as the impact of inflation and monetary policy developments, economic conditions in Japan and around the world may be adversely affected for an uncertain period of time.