Wednesday, January 25, 2012
Japan has 32 billion U.S. deficit, first in decades
In a sign of a slowing global economy and reduced export power, Japan posted a 32 billion dollar trade deficit. This is Japan's first trade deficit since 1981.
Increased fuel exports are one factor causing the deficit as Japan lost nuclear power after the disastrous tsunami. Only four of fifty four nuclear power plants are in operation. Japan's exports fell by 2.7 per cent to 843 billion in 2011.
A senior economist analyst commented on the situation:"[The deficit] reflects fundamental changes in Japan's economy, particularly among manufacturers, Japan is losing its competitiveness." The strength of the Yen also impacts negatively on exports as Japanese products become relatively more expensive relative to those of competing countries such as China.
Japan is actually facing difficulties well known in the U.S. Japanese based manufacturers are outsourcing production to countries such as China to take advantage of lower labor and other costs. An analyst noted:"It's gotten difficult for manufacturers to export, so they've moved production abroad so that products sold outside the country are made outside the country," For more see this article.