Millennium Post

N-plants closure swells Japan energy imports, takes trade deficit to record

Provisional data on Monday showed that exports rose 9.5 per cent to $680.9 billion, while imports jumped 15 per cent $793.2 billion.

Japan's trade deficit in 2012 was 6.94 trillion yen. The deficit has been rising as the costs for imports have surged with the weakening of the Japanese yen and increased purchases of foreign oil and gas. Japan's nuclear reactors have been offline for safety and regulatory checks after the March 2011 earthquake and tsunami devastated the Fukushima nuclear plant.

The largest shortfall, $128.8 was with the Middle East, source of the largest share of resource-scarce Japan's imports of oil and gas. The weaker yen is a mixed blessing for Japan. It is boosting corporate profits due to higher yen-denominated income for companies that earn a large share of their revenues overseas.

‘Our imports are affected both by the yen's value and also by oil prices, so we will be watching the situation,’ chief government spokesman Yoshihide Suga said.

He reiterated Japan's eagerness to buy lower-priced shale gas from North America, pending US approval of such exports.

Apart from energy imports, Japanese manufacturers increasingly are relying on overseas sources for components for electronics and other products.

The recovery in exports so far has failed to offset those costs and Japanese consumers are paying sharply higher prices for fuel and food. Japan's deficit with China, its biggest trading partner, rose more than 43 per cent in 2013 to $49 billion. With the US, it logged a surplus of $59.5 billion, up nearly 20 per cent from a year earlier. December's deficit was $12.7 billion, the fourth straight month of increase.

Japan's economy emerged from recession a year ago and has been gaining momentum, spurred by strong government spending and monetary stimulus.

That has also pushed demand for imports higher, a trend likely to continue at least until a 3 percentage point increase in consumption tax to 8 per cent takes effect in April, said Marcel Thieliant, an economist for Capital Economics in Singapore.
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