Japan had a 2.79 trillion yen trade deficit in January, which was wider than the 2.49 trillion yen expected by economists.
This was the larges monthly deficit on record, reports Bloomberg.
Exports during the monthy climbed 9.5%, which was lower than the 12.7% expected.
Japan has been employing aggressive monetary and fiscal policies in its effort to stimulate the economy.
“Abenomics” — named after Prime Minister Shinzo Abe — has been highlighted by a weaker yen, which in theory makes the countries goods more competitive in foreign markets.
The obvious downside of a weakening currency is that imports become more expensive. And among other things, Japan imports a lot of energy.
“Japan’s fuel imports have been historically high due to the shutdown of the nuclear power plants, and the depreciation of the yen has further pushed up import growth in value terms,” said Societe Generale economists ahead of the report. “However, this is not enough to fully explain the cause of the expansion of the trade deficit. We think that stronger domestic demand is pushing up recent import growth. In addition to the increase in winter bonus payments and the recovery in the employment situation, last-minute demand before the consumption tax hike startgin in April has been strong.”