Japan's trade deficit expands nearly 70% in April

Another reason to turn back on the nuclear reactors.

With the yen hitting multi-year lows against the dollar, some politicians have started voicing concerns over its negative impact on people’s lives.

Starting? Shutting the barn door after the horse is gone! News like this will soon be followed by something or another by Abe painting a pretty picture, at least until July.

Then the other show will drop and Abe will be telling everyone to suck it up.

Now the politicians are starting to voice concerns. Hell those guys should start spending time on this website where we have been raising concerns since day one!

Or better still, just let a few of us run things for a while. Would be more efficient than their coming round to our ideas months later and then debating it for 2 years before apathetically doing nothing.

tkoind2. You said it. Several people on here have been voicing those concerns for several months. What are these politicians actually doing with their time?

" Exports in April rose 3.8% to 5.78 trillion yen while imports jumped 9.4% to 6.66 trillion yen."

The exports rely heavily on IMPORTED raw materials and outsourced IMPORTED components, and the NATION relies heavily on IMPORTED fuels.

Abe is like the captain of the Titanic but intentionally driving the ship into the field of icebergs. He ripped a new gash below the waterline. Grab a lifeboat if you can.

The deficit would disappear tomorrow if the government turned on the nuclear plants.

Upgrayedd. So why did Japan have a deficit while the nuclear plants were running? Was that just a 20 year anomaly?

Upgrayedd. So why did Japan have a deficit while the nuclear plants were running? Was that just a 20 year anomaly?

Japan didn't run trade deficits while the nuclear plants were running. There might have been a few but it was mostly surpluses. The recent spat of trade deficits started 3/2011.

Time for MOF need to take advantage of what BOJ has done. Cut budget deficits, hike sales tax and reform economy. Government debts at 240% of GDP cannot be sustained.

Whether you like it or not, Japan's gonna have no choice BUT to fire up the nuclear reactors. A sinking yen is going to send fuel costs THROUGH THE ROOF.

These genius J-politicians managed to paint themselves into a corner, bite off more than they can chew, AND shoot themselves in the foot in one fell swoop.

Why? Because Japan's BEST game is always "Me too!". They see the west printing money, so they think they can do so as well.

Except they forgot to notice that the dollar is the world's reserve currency, and everybody HAS to hold it, so Bernanke can print money till the cows come home.

On the other hand, NOBODY except Japanese have to hold Yen. So when these brilliant J-politicians announced they were purposely devaluing their own currency, it was already over before it started.

Until recently, the Yen was a safe bet, since it was so strong. A stable investment. But when government idiots announce to the world their intentions, all those people immediately start to DUMP the yen.

Now they've got NO moves left. If they start to contract, interest rates will rise and the ENTIRE budget will be spent servicing the debt.

i think better wait because "Abenomics" is just five months old :) sarcasm tobe continued...!

Abenomics plus nuclear freeze means this is likely to continue.

NOW it has dawned on them that devaluing the currency to boost exports will at the same time increase import costs and consumer prices? Duh!!!

Upgrayedd. Japan has been running deficits since the mid-nineties or earlier. The deficit in 2009 was 32 trillion Yen. Seems to me the nuclear reactors were humming along just fine then.

tkoind

Now the politicians are starting to voice concerns. Hell those guys should start spending time on this website where we have been raising concerns since day one!

Maybe that IS what they do with their spare time. Some of the posters on here have some pretty weird views on life.

Upgrayedd. Japan has been running deficits since the mid-nineties or earlier. The deficit in 2009 was 32 trillion Yen. Seems to me the nuclear reactors were humming along just fine then.

You must be mistaken. The balance of trade in 2009 was +2.6 trillion yen.

http://www.customs.go.jp/toukei/shinbun/happyou_e.htm

Perhaps you are confusing trade deficits with budget deficits?

Whether you like it or not, Japan's gonna have no choice BUT to fire up the nuclear reactors. A sinking yen is going to send fuel costs THROUGH THE ROOF.

Going to? Already are, and the electric bills are going up, gas prices are up, food costs are up, the middle men are charging more, salaries are stagnant........Abenomics is like Reaganomics, the rich get richer and the middle class slowly disappears and the poor get even more poor.

But everyone is getting high on the fumes of Abe's gas!

The problem is how long with EU and US tolerate Japan's currency manipulation. Right now, seems like for this year, Japan is safe on suppressing the Yen. What about next year? With the problem arising out of SE Asia and the worsening in Spain, Italy, and now creeping on UK, how long will the EU or G8 allow Japan to float the yen?

This whole Abenormic is completely based on this concept and what if it falls apart? You know the EU won't stand on Japan's side forever, at best, as they've said a year at most. So if Japan can't fix all its problem within the year, which will be monumental, what then?

Forget China for the moment since the frozen/cold politics/economic relationship will not thaw for the foreseeable future, China won't help Japan in anyway and the dependency of Japan's tech will diminish so long as there is sufficient growth in China. So that balance is obvious tilting in China's way. And if Japan doesn't get out of this rut, and most experts don't foresee that to happen any time soon, at some point in time, the yen will have to rise back to the 90 level to justify the huge reserve and savings.

That's when everything will fall. I've always said Abe is a shortsighted gambler. He's got tunnel syndrome where he thinks Japan on its own will push through just like the old times. Times have change. Japanese companies are not the same dominant self as before. Even its strong heavies such as Toyota and the auto industry, they are not taking advantage of the biggest consumer market which is China. So long as Japan is shut out from China, its going no where. SE Asia is going through a worse rut. The Thai economy and workforce that Japan depends so much on for future growth is spiraling into the abyss. India is having its own problems. Africa is simply not ready.

If Abernormics fail this year and the next, its all over for Japan. Since there won't be an unsaturated market big enough for growth to support Japan's exports. Couple with the continuing aging problem and the huge debt crisis that no one is talking about, I predict if Japan will simply implode like the Koreans did and begin a fire sale.

Its so sad and ironic to say but the only one that can help Japan is probably China. But that ship had long sailed and gone.

A lot of people don't get what Abe's intentions are. Rising consumer prices roughly equates to inflation, which is one of Abe's main aims. He is gambling on the notion that Japan's 15% export-driven economy can generate enough additional income (through currency manipulation) to kickstart the economy. He is still largely ignoring the domestic economy, which makes up the other 85%. Japan has been printing money (QE) for a long while before Mr. Abe came to power. The previous DPJ government used large amounts of QE on many occasions, although not to the same extent Abe plans to.

Abe knows that import costs will rise, which is how he is going to fuel inflation, if you'll forgive the pun. Nuclear power stations will be restarting soon, which will have an effect on the deficits. So-called Abenomics will fail because the domestic economy cannot and will not increase wages, which means 85% of the population will face increasing austerity as prices and taxes rise, which will destroy real growth once the LDP spending spree is over.

Inflation is like taking a heroin. A drug that makes you high and comfort only for a while. You will eventually die overdose from it.

Inflation is like taking a heroin. A drug that makes you high and comfort only for a while. You will eventually die overdose from it.

As opposed to deflation?

For those of you connecting the trade deficit to the shutdown of the nuclear power plants, take a look at <http://www.tradingeconomics.com/japan/balance-of-trade >

Select January 2009 as the starting date and hit refresh. You will see that the current negative trend started at the end of 2010 or beginning of 2011, several months before the earthquake. Since most of the NPPs were kept running till the end of 2011 and some of them well into 2012, I think it is safe to say that there are other causes for the trend.

tkoind2May. 22, 2013 - 10:29AM JST

Now the politicians are starting to voice concerns. Hell those guys should start spending time on this website where we have been raising concerns since day one!

Very true.

Yourself, Globalwatcher and myself have been saying, even before Abe became PM, that no matter how cheap the Yen got, people were not going to bin their Galaxys and I-pods and start buying the often second rate Japanese technical equivalent.

This is a different world from the 1970s and 1980s. An export driven reovery will just not happen

Just got back from California and the worries among the Japanese business circles is that even such sacred cows as the motor industry is losing ground to its competitors and it has very little to do with price.

Bad news for steel exports.

UpgrayeddMay. 22, 2013 - 12:33PM JST

Perhaps you are confusing trade deficits with budget deficits

He/she is confusing trade deficits with current account surpluses. Japan still runs the biggest current account surplus, no matter the trade deficit, of the G8 nations.

For those of you connecting the trade deficit to the shutdown of the nuclear power plants, take a look at <http://www.tradingeconomics.com/japan/balance-of-trade >Select January 2009 as the starting date and hit refresh. You will see that the current negative trend started at the end of 2010 or beginning of 2011, several months before the earthquake. Since most of the NPPs were kept running till the end of 2011 and some of them well into 2012, I think it is safe to say that there are other causes for the trend.

In the 20 years before March 2011, Japan's monthly trade deficit went negative exactly 7 times.

Since 3/11, Japan's monthly trade deficit has been negative 19 times.

The reason is oil. Nothing more.

A surplus with the US and an expanded trade deficit of 60.2% with China. May be its time to make amend with China to improve on this trade figure.

Even Japan's account surplus is rapidly shrinking, and experts say by 2016 (if not much sooner), it will be in negative territory. By then, Japan will have to fund their debt with foreign borrowings. But who's going to buy Japan debt when their level is approaching 300%? The only thing that Japan has going for them in their export drive at the moment are their suddenly cheaper cars. Take away the auto sector, and they're essentially digging their own hole in the grave, as both their per capita income and purchase power parity GDP sinks to make Japan much poorer.

Even Japan's account surplus is rapidly shrinking, and experts say by 2016 (if not much sooner), it will be in negative territory.

Source?

biggest cost is energy imports for electricity generation gas/oil. if the Nreactors were back on it would take a big cut out of the imports required. Japan cannot do without N power for the foreseeable future, unless you want to see more deficits and larger electricity bills

@SquidBert yes because of the high yen and shrinking exports, now then yen is at a normal level have the NPP back on will probably erase the deficit.

UpgrayeddMay. 22, 2013 - 09:29PM JST

Source?

I read the same thing, a bit too tired to find the source. Surely You can google it yourself? I think I read about 4 sources that said 2016 and a few that said 2017.

With 85% of the economy being domestic, I see only one objective with this yen devaluation: making fossil fuel so expensive that Japan will have no choice but to restart NPP. I can smell the nuclear village power!

Looks to me like the account surplus is recovering if anything. Once again, chose an early starting date (e.g 2009) and hit refresh. It is obvious the negative trend started much earlier than anything that can be related to the failure of nuclear power generation.

http://www.tradingeconomics.com/japan/current-account

It is important to understand that:

*Only 25 percent of electricity was generated by nuclear power prior to the accidents. (And even if we have a restart, this amount will be less) *Nuclear fuel cost is about 1/3 compared to fossil fueled thermal plants, but operating costs are much higher. *Only a fraction of oil imports is used for electric power generation.

The nuclear shills on here are right!

A weak yen means higher and higher oil prices for Japan so economic pain will coerce public opinion on nuclear power until the next earth shaker causes a reactor to poison all of Japan instead of just part of it and the west coast of the US-then it is ....game over

Putting up Energy costs is a World wide problem . That is why a lot of people have installed Solar electricity . Also to help the reduction of pollution in climate change. ...When a country starts to loose its exports because better products can be made in China it is time to think what Japan did to other countries by flooding them with cheep products. I always bought Toyotas but the last 3 were a big disappointment when various problems came up to poor manufacturing of components failure. The next vehicle will come from China not because it is better or cheaper it will be based on reliability.