At the end of fiscal 2013, it was revealed by the Finance Ministry that Japan’s trade deficit had increased nearly 70 percent from the last year, amounting to a record 13.75 trillion yen (around US$134 billion) in the country’s third straight year of the economy being in the red. In 2013, Japanese exports failed to counterbalance surging energy costs as the majority of Japan’s nuclear reactors were mothballed after the 2011 Fukushima nuclear disaster. With the nuclear reactors offline, Japan has needed to import fossil fuel for thermal energy production, accounting for majority of the deficit.
Japan’s Ministry of Finance reported on Monday that exports in 2013 rose 10.8 percent from the year before, amounting to 70.8 trillion yen (around US$690.5 billion) in total value. But this improvement was still overwhelmed by import costs which increased to 84.6 trillion yen (around US$825 billion). The annual rate of growth in exports decreased to 1.8 percent in March, coming from a peak of 18.6 percent in October. Japan’s spending for oil and gas imports rose 18 percent in fiscal 2013, totaling to 13.7 trillion yen (around US$133.6 billion), accounting for the biggest percentage in the country’s overall deficit. With Japan Prime Minister Shinzo Abe pushing for a weakening of the Japanese yen last year, it dramatically pushed costs for all imports higher. The exports, while making a tidy profit have not risen as quickly and as much as expected.
Japan’s energy costs have soared since the 2011 disaster at Fukushima. With no internal fossil fuel sources, the closure of almost all of its nuclear reactors have hit the country’s economy hard. Prime Minister Abe is hoping to restart some of those plants to help reduce the burden on the economy, but he faces a huge fight with a Japanese public still convinced that the nuclear reactors are unsafe. And in the wake of the consumption tax hike that is coming relatively soon, Japan’s struggling economy will not have a breather as economists foresee that the public may rein in spending. But this may have a helpful effect, says Marcel Thieliant of Capital Economics in a research note. “Looking ahead, consumers are likely to rein in spending in the wake of this month’s consumption tax hike, which should reduce import demand,” he said.
[via Global Post]
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