TOKYO, Jan 27: Japan’s trade deficit surged to a record USD 112 billion in 2013 as the shutdown of nuclear power plants swelled the nation’s energy import bill.
Provisional data today showed that exports rose 9.5 per cent to USD 680.9 billion, while imports jumped 15 per cent USD 793.2 billion.
Japan’s trade deficit in 2012 was 6.94 trillion yen. The deficit has been rising as 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, USD 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 today.
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 USD 49 billion. With the US, it logged a surplus of USD 59.5 billion, up nearly 20 per cent from a year earlier.
December’s deficit was USD 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. (AGENCIES)
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