Japan reports biggest trade surplus in over 4 years

Having a trade surplus doesn't neccessarily mean good news. Naturally, in a bad economy, people don't spend much and when they do, they tend to buy things that are domestic usually because they are cheaper.

In a robust economic environment, even a trade defecit isn't always bad- it just means that people have money to spend and are buying foreign products. The idea that Japan is doing well because of its trade surplus is a smokescreen put forth by the gov to vindicate Abenomics. The reality is that there is a trade surplus because the Japanese people have less and less money to spend, and when they do, they buy domestic products because they are cheaper. That's all.

Huge trade surpluses like China means Asian countries including Japan will be under tremendous trade protectionist pressure from the next USA administration. The US political tone is now basically a rise in protectionism. Japan being economically structured as an exporting nation will be adversely affected. Expect exporters to face trade restrictions/tariffs and stronger currencies against US dollar.

@Aly Rustom: Where on earth did you study economics? If domestic goods were cheaper, they'd sell better in a strong economy as well.

More nuclear energy will help more. Turn them back on and create bigger surpluses to save the economy.

The US political tone is now basically a rise in protectionism. yep when the $ was low all was good now theyve stopped printing money theyre complaining, Id like to see the US start tariffing Chinese goods, Im sure the chinese will retaliate with tariffs on US good imported as well as made in China. That the problem with the US they want a robust economy with strong exports, they want to limit the goods China, Japan sell into the US and they expect China , Japan to buy there debt so there citizens can keep borrowing at low interest the goods that keep there economy flowing! LOL itd be actually funny if it wasnt so pathetic.

@Angus McGillicuddy

Where on earth did you study economics? If domestic goods were cheaper, they'd sell better in a strong economy as well.

Not necessarily. This would only make sense if the cheaper domestic goods you're talking about are the exact same quality/value as foreign imports. In reality, they never are. Domestic goods are almost always inferior and substituted with higher quality imports. For example, hungry Japanese consumers with extra money will opt for European cheese, not twice as much Japanese cheese.

The majority of domestic goods in every country are cheaper only because they're inferior. The only exceptions are goods which the country has a competitive edge in producing and probably exports around the world (cars and electronics in Japan, wine in France, watches in Switzerland, corks in Portugal, bananas in Equador etc). Every country really sucks at producing the majority of things, but most countries are good at producing at least one thing.

Good news Abe Shinzo and LDP.

Good news Abe Shinzo and LDP.

yes, first such a HUGE trade surplus (US$2.2bil) under his leadership, Abenomics !

Good news Abe Shinzo and LDP.

So what? Doesn't matter much to anyone else unless unemployment goes down and salaries go up. Which they're not, because no matter how much the government tells companies to stop hoarding cash, no one listens.

though both imports and exports fell

So, despite the colorful positive headline, the news is actually bad. Fewer people are buying Japanese goods, and Japanese are buying even fewer imported goods. Bad plus bad does not equal good, bad plus bad equals worse. And it can only go downhill from here.

Its import from china plunged nearly 21% is a good news for Japan.China amass huge surplus,using it to build their military capacity to against Japan .People of Japan should buy less china's products.

"the news is actually bad."

Cheap oil is actually good news, believe it or not. Especially for Japan, which has to import all of it.

With globalization, it is the account surplus that matters. As many companies make most of their products in their target markets. These profits come home, which plus and minus other factors such as trade, and tourism, make up the account surplus. That is what should be the center of focus, not the trade balance.

Where on earth did you study economics? If domestic goods were cheaper, they'd sell better in a strong economy as well.

Not necessarily. This would only make sense if the cheaper domestic goods you're talking about are the exact same quality/value as foreign imports. In reality, they never are. Domestic goods are almost always inferior and substituted with higher quality imports. For example, hungry Japanese consumers with extra money will opt for European cheese, not twice as much Japanese cheese.

There you go Angus. A very good explanation I would say.

Elkarlo, I think people focus on the trade figure because it seems as though THAT is what gets managed. In the long run the account follows the trade figure. And the trade figure is a hard number that more or less can't be faked with mumbo jumbo.

But let's put it another way. Japan has been able to build a great nation through its trade surpluses. It has been able to cushion itself from various difficulties much better than say, Argentina or Greece, but even the UK and Italy, because of its trade surpluses, which have enabled it to build up reserves, a reliable currency and bond system, etc.

How has Japan kept itself together for 25 years of recession? I would point first to trade surpluses. Almost everything that Japan has done since Meiji has been owed to trade surpluses.

There is a lot of quibbling and bickering about meaningless details in this thread. I don't see how a real economist can miss this point, which is a mountain compared to all the molehills dotting this thread. And yes, 2.2 billion is a trivial amount in the scheme of things, but a surplus is not a deficit, and it signals better days for Japan, ceteris paribus.

mr_jgb

Japan being economically structured as an exporting nation will be adversely affected. Expect exporters to face trade restrictions/tariffs and stronger currencies against US dollar.

Meager 2.2 billion is hardly an exporting nation.