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Japan's trade deficit narrows on slower imports

Published on NewsOK Modified: May 21, 2014 at 6:13 am •  Published: May 21, 2014

TOKYO (AP) — Japan's trade deficit narrowed in April after the yen strengthened and a sales tax hike dampened demand for imports of consumer goods.

Costs for imports of oil and gas that account for about a third of the country's imports moderated, reflecting a rise in the yen after a year of decline and decreases in shipments of some fuels.

The 808.9 billion yen ($8 billion) deficit in April, according to preliminary figures released Wednesday by the Ministry of Finance, compared with a gap of 877.4 billion yen a year earlier and with a 1.7 trillion yen deficit in March.

Japan's exports are improving as the economy emerges from a protracted slump and recoveries gain momentum overseas, but Japanese manufacturers have shifted a large share of their production offshore to cut costs, avoid trade barriers and be closer to fast growing emerging markets.

The Bank of Japan wrapped up a two-day meeting Wednesday with no change in its ultra-loose monetary policy and an upbeat assessment of the economy, saying it was "expected to continue a moderate recovery as a trend."

But economists expect more action from the central bank later in the year.

"The chances of additional stimulus being announced as soon as July have shrunk substantially, but we still think that more easing will eventually be required," said Marcel Thieliant, an economist for Capital Economics based in Singapore.

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