Japan ran its biggest annual trade deficit of ¥19.97 trillion ($155.27 billion) during the year 2022, as higher energy and raw material prices along with the yen’s precipitous fall boosted import costs, government has showed the report on Thursday, offsetting growth in exports as the impact of the COVID-19 pandemic waned.

The Finance Ministry said in a preliminary report that the value of imports jumped 39.2% to a record ¥118.16 trillion, led by crude oil, coal and liquefied natural gas. The exports have grown 18.2% to ¥98.19 trillion, also a record high, due to increased shipments of cars and steel.

Higher energy and raw material prices in 2022 raised supply concerns. Partly due to the war in Ukraine, resource-scarce Japan imports almost all its oil, and prices for crude oil and other commodities surged last year.

Trade with China was apparently hit by its strict “zero-COVID” policy, leading Japan’s trade deficit to more than double to ¥5.83 trillion.

The annual deficit reported in 2014 is the country’s largest since comparable data was made available in 1979.

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However, the trade deficit for December alone narrowed more than expected in a sign that the impact from the weak yen and high energy costs has begun to soften.

A weak yen cuts both ways, inflating the value of imports but also boosting the overseas earnings of Japanese exporters.

The value of the Japanese yen fell against the U.S. dollar and other currencies as central banks raised interest rates to fight inflation.

Alarmed by the yen’s rapid fall against the dollar, a reflection of the divergent monetary policies of the Bank of Japan and the U.S. Federal Reserve, Japanese authorities intervened in the currency market to stem the depreciation.

The smaller trade gap is definitely positive, said Hideki Matsumura, chief economist at Japan Research Institute. “An increase in the trade deficit means there’s a higher outflow of income to foreign countries. If the deficit narrows, income remains in Japan, which is positive for both households and firms.”

The yen remained stronger than ¥140 per dollar in December. The deficit was the biggest since Japan began keeping comparable records in 1979, the ministry said.