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© (c) Copyright Thomson Reuters 2013.Japan faces record-long trade deficit with few signs it can reverse trend
By Tetsushi Kajimoto TOKYO©2024 GPlusMedia Inc.
22 Comments
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some14some
Does it mean Abenomics has failed miserably or some miracles are still expected? of course it's former.
sangetsu03
The main cause of imbalance is the rise in energy costs. The phrase "estmates suggest" means nothing. With almost no nuclear power now, Japan's gas and oul power plants are running at full capacity, and these consume vast amounts of energy, which is entirely imported. For those who aren't aware, a home consumes as much af 5 times more energy than a car. A 25% decrease in the value of the yen has also resulted in a likewise increase in the cost of imported energy.
bruinfan
This is one of the effects of Abenomics. Sorry, but the weaker yen helps little here.
BertieWooster
Japan has to produce products that are a little more enticing than Abe's nuclear power technology or radioactive sea food.
Keith Tarrier
So many products that use to be made in Japan by Japanese companies are now made overseas. Loss of exports and loss of local full time jobs over the past 15 years will be hard to counter with simple Abenomics.
They certainly need to get the local economy back on track but this may be hard to do with so the ageing population.
fds
hey! they should start taxing japanese companies on their world wide income instead of waiting for them to bring it back!
OldHawk
Japan needs somebody to export to, and their biggest customer is still going through a bad economy too.
(Wondering if the omiyage I bring back from my trips count...)
JeanValJean
Offshoring production has become a necessity due to labor costs attributable to mandated benefits and social programs. This is endemic in all or most developed nations plagued with socialist policies.
Abenomics will only hurry along the decline to insolvency.
bruinfan
How does South Korea do it (stay in the black)? Do they have a greater share of energy resources?
Kent Mcgraw
The small gains that were made by the decreasing Yen were in reality small losses. The stock market did not rise by the 25% loss in the value of the Yen. The buying power decreased and people have not been put back to work, wages have not increased and the only gains that have been made are by those who have played the stock market. Exports will not increase as most manufacturing is done overseas now and since the manufacturing has shifted to overseas where there is less corporate taxes and lower wages, there is no incentive to bring jobs back to Japan. Everyone eventually loses with Abenomics.
Wakarimasen
Why JGB yields aren't sharply higher and the yen much weaker is an eternal mystery.
SamuraiBlue
Is Reuters under som kind of split personality? In the business section there is an article stating the following;
And yet within this article it states;
Can't Reuters come out with a unifed comment on the matter?
888naff
The yen is not weak…end of.
…can we please have some better reporting from the foreign news agencies that just run to others commentary and repeat story and can’t look back more than a couple of years at the data…
wildwest
The party is over then;(. How any one can expect a 10% drop in the yen would drive Japanese exports not made in Japan (or the profits reterned)and not expect an incress in imported commodities of which are not exported therefore driving inflation needs to explain what I'm missing
randomman
There is a common misunderstanding between the trade balance and current account of a country. The current account is basically the net income and Japan is still +577 billion yen which includes the recent -1000 billion yen trade deficit. Note that in comparison, the US has a negative current account. The weaker yen and reliance of fossil fuels has increased the trade deficit.
Mike45
I believe a point missed and rarely discussed is Japans insular attitude towards anything foriegn. Allowing foriegn investment and wholly owned companies (not joint ventures) to enter Japan with products Japanese are starving for...couldnt it help revive the economy? In every store (they are all the same in every city) vending machine, conbini cafe etc, all the products are the same. I cant see what the difference is between a lawson, 7 11, family mart or a Seibu or Donki Hotei etc. Domestic paints, tools, fashion etc are over priced and usually a few companies control it all. I dont see this unique Japan attitude ever changing. Just as was mentioned about how to make Japan more foriegner friendly for the Olympics, Japanese dont want to be foriegner friendly towards anything. from abroad so whats the point. Its been said that during the immediate post war time, this dark apathy and insular attitude had disappeared and their was hope and freedom in the air. Some also say this mess was created during the post war years, when the nationalist and others got back into the government to strengthen the U.S. position on the spread of communism. I think its going to take allot more than Abenomics to turn it around.
Open Minded
SamuraiBlue: both articles are not contradictory. Fossil fuel import increase an already established trade deficit.
CH3CHO
Mike45, there is no restriction to direct foreign investment into Japan. If you want, you can set up your wholly owned company (no JV) in Japan.
Have you ever been to Japan? You do not see the difference between 711 and Donkihote (Don Quixote), do you? I cannot believe it.
Kent Mcgraw
Japan needs to stop the welfare of the mob bosses and open up the way for small business. Mike 45, it is not just anything from abroad but anything that does give money to the politicians. Japanese government hates free enterprise and freedom while they wish to make the people believe they are free. Pay the government and pay their friends and then you can maybe do something in Jpan, same as in any third world country but Japan does not think they have a third world government. Excuse me, this is offensive and will be removed by the censor in this free country.
danalawton1@yahoo.com
Japan's export capabilities really have not "waned" at all.... the problem is that S. Korea, Taiwan, and China are all now capable of competing with Japan. Also, Japan was the king of making electronic products that required moving parts back in the 80's and 90's.... most electronic components no longer require those moving parts any longer. Even the DVD and BluRay will be a thing of the past in just a short time. I stopped buying DVD's about 3 years ago when it became easier to download movies and such.
kchoze
The total trade deficit in 2012 was about 7 trillion yens. If restarting the nuclear plants would save 3 trillion yens, that's nearly half the way to eliminating the trade deficit. That is a significant chunk of it gone.
The falling yen will bring about increased exports, but only on the long-term. In the short term, it increases the value of imports, but increasing exports is harder as you need to ramp up production in Japan before you can start exporting. The lower yen does increase the likelihood of investments in Japan as it makes it more competitive and makes exporting more profitable, profits companies can then reinvest to increase production.
sengoku38
Japan really needs to restart the nuke plants soon. The costs of keeping them shutdown is enough to host 10 Olympic games per year. It's really a waste of everyone's hard work and the country's resources.