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Japan’s Trade Deficit Surging in the First Quarter

in International Business

Japan’s Trade Deficit Surging in the First Quarter

Japan’s trade deficit hit its highest in January with exports dipping 9.3% from a year earlier, while imports rising 9.8%. There are number factors that resulted in such a high trade deficit in Japan.

The nuclear impact is certainly the biggest factor due to which fuel imports went up. The earthquake and tsunami on 11 March last year caused substantial damage to the Fukushima Daiichi nuclear plant, as a result Japan’s nuclear plants have been shut and utility providers are relying on traditional thermal power stations to generate electricity for which natural gas and coal are needed to operate. These commodities are mostly imported which has pushed the trade deficit up.

The appreciation of the yen against the US dollar has made Japan products less attractive to foreign buyers, as they have to pay more for them.

The delay in the global economy recovery has also adversely affected Japan’s trade deficit, as it has been hurt by a slowdown in its key export markets such as the US and the Eurozone.

Author: Samadi. Kabul, Afghanistan


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