Official figures show that Japan posted its first trade deficit in almost two years last month, due to rising commodity prices and weak demand for its exports ahead of China's Lunar New Year holiday.
The finance ministry said exports, a key driver of Japan's economy, rose at an annual rate of just 1.4% in January - the 14th consecutive month of growth, but a well off the 13% surge in December.
That came as instability in the Middle East and North Africa pushed the price of oil and other commodities up amid concerns supplies could be cut, sending Japan's import bill up 12.4%. And analysts warned that with commodity prices looking set to rise further Japan could see its cost of imports continue to grow.
The trade deficit for export-dependent Japan, which is struggling to revive its sagging economy, stood at 471.42 billion yen ($5.7 billion), compared with forecasts for a 49.6 billion yen surplus.
'Exports to China grew by only 1% in January, compared with 20.1% in December,' said a finance ministry official.
The Japanese economy, hit hard by the global downturn, is broadly gathering steam as wider overseas demand remains strong, and officials predict the trade balance will swing back to black soon. Japan's economy has been buffeted in recent months by a strong yen, which made exports more expensive and eroded companies' repatriated profits.
However, it has eased off its 15-year high of 80.21 against the dollar struck in November and is currently sitting around the high 82 yen mark.
Japan reported last month that its trade surplus more than doubled in 2010 and exports to key trade partner China had hit a record high, as robust overseas demand indicated gathering momentum for its recovery.
The Bank of Japan this week upgraded its view of the economy for the first time in nine months on accelerating global growth but kept its easy monetary policy in place due to persistent deflation.
Japan's real gross domestic product slipped at an annual rate of 1.1% in the December quarter as expiring car subsidies hit car sales, a new tobacco tax sapped cigarette demand and a strong yen hurt exports.
But the contraction was smaller than expected, and there are hopes the economy will pick up this quarter on improving demand from key partners such as China, which overtook Japan in 2010 as the world's second economy.
