Japan's exports hit record high, but trade deficit continues

Japan saw record-high exports last year, as its annual trade deficit declined 44 per cent from the previous year, the Finance Ministry reported Thursday.

The trade deficit, which measures the value of exports minus imports, totalled 5.3 trillion yen ($34 billion), according to government data, as imports ballooned on the back of rising energy costs and growing inflation around the world.

Exports from the world's third-largest economy totalled 107.9 trillion yen ($691 billion), surpassing the 100 trillion yen mark for the second-straight year, and the biggest value on record for comparable data, which dates back to 1979, the ministry said.

Some companies may have sped up their exports in anticipation of potential tariffs by US President Donald Trump.

Trump has said he expects to put 25 per cent tariffs on Canada and Mexico starting Feb. 1. During his campaign, he threatened to impose tariffs on imports from China, although details on that remain unclear.

For the month of December, exports gained a greater-than-expected 2.8% on-year, while imports rose 1.8 per cent. Exports grew to Asian and European nations, while dipping slightly to the US Imports grew most from India, Hong Kong and Iran.

Japanese demand was especially strong in vehicles, semiconductors and other machinery.

The weakening yen, another recent trend, has the effect of inflating the value of imports. The US dollar has been hovering at 150-yen levels, sometimes surpassing 160 yen, over the past year, while a year ago it was often at 140-yen levels.

Japan has recorded a trade deficit for four straight years, but last year's deficit was considerably smaller than the 9.