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By Kantaro Komiya
TOKYO (Reuters) – Japan likely posted its biggest industrial deficit in more than nine years in August as the yen fell to its lowest point in 24 years boosted import costs, a Reuters poll found on Friday.
The yen’s sharp drop prompted additional verbal warnings from Japanese politicians this week, while economists said the currency’s depreciation could push Japan’s core inflation to around 3% through the end of the year, reducing household purchasing power.
The industry’s august balance likely ended in a deficit of 2398 million yen ($16. 8 billion), as a 46. 7 percent increase in imports outpaced the 23. 6 percent increase in exports, according to the median estimate of economists in the survey.
The expected deficit would mark the biggest monthly record since the 2. 79 trillion yen deficit in January 2014.
“While crude oil charges stalled after July, the yen’s fall boosted the import charge,” said Kenta Suwa, an economist at Mizuho Research and Technologies.
The world’s third-largest economy recorded an annualized expansion of 3. 5 in April-June due to family and business spending forged to ease COVID-19 restrictions, revised gross domestic product data showed on Thursday.
But analysts are so positive about japan’s client expansion because of the dangers of inflation and the weakening of the global economy.
Other data expected for next week likely shows that annual wholesale inflation in Japan hit 8. 9% in August, then 8. 6% in July, a sign that corporations face relentless value pressures that reduce profits, according to the survey.
Orders for critical machinery, a leading indicator of business spending, are expected to fall 0. 8% month-on-month in July after a 0. 9% increase in June, according to the survey.
The government will release industry figures at 8:50 a. m. m. of September 15 (23:50 GMT of September 14) and device order data at 8:50 a. m. m. of September 14 (23:50 GMT of September 13).
The Bank of Japan will sell wholesale value data at 8:50 a. m. m. of September 13 (23:50 GMT of September 12).
(This story corrects the industry’s balance to 2398 billion yen, 2398. 2 trillion, in paragraph 3 and corrects the January 2014 balance to 2790 billion yen, 2790 billion, in paragraph 4)
($1 = 142. 7700 yen)
(Reporting via Kantaro Komiya; Editing via Kim Coghill)