Japan’s trade deficit narrowed 2.4 per cent on-year to $US8.7 billion ($A9.4 billion) in August largely due to shrinking energy bills that had soared in the wake of the Fukushima crisis, official data shows.

The country’s deficit stood at 948.5 billion yen against the year-before shortfall of 971.4 billion yen, the finance ministry said on Thursday.

The data, although better than the market median forecast of a 1,028 billion yen deficit, extended the run of shortfalls to a 26th straight month.

Exports slipped 1.3 per cent to 5.71 trillion yen, affected by lower shipments of chemical products and cars.

Imports were down 1.5 per cent to 6.65 trillion yen as imports of crude oil and coal fell.

By region, Japan ran a trade deficit for the 30th straight month with its biggest trading partner China but the shortfall narrowed.

Japan’s deficit with its giant neighbour shrank 23.6 per cent to 233.9 billion yen with higher exports of nonferrous metals, machinery and automobiles.

Japan’s surplus with the US shrank 22.0 per cent to 385.5 billion yen as car exports tumbled 13.5 per cent.

With the European Union, Japan’s deficit nearly halved to 34.5 billion yen thanks to robust exports of cars and machinery.