TOKYO: Japan's trade deficit narrowed 2.4 percent on-year to $8.7 billion in August largely due to shrinking energy bills that had soared in the wake of the Fukushima crisis, official data showed Thursday.

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

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 percent to 5.71 trillion yen, affected by lower shipments of chemical products and cars.

Imports were down 1.5 percent 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 percent to 233.9 billion yen with higher exports of nonferrous metals, machinery and automobiles.

Japan's surplus with the United States shrank 22.0 percent to 385.5 billion yen as automobile exports tumbled 13.5 percent.

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