Japan will learn the hard way that destroying your currency is not an
viable economic strategy.
JAPAN posted a record 1.63 trillion yen (US$17.4 billion) trade deficit in
January as rising exports trailed surging imports of crude oil and gas due
to rising prices and the weakening yen.
The provisional data released yesterday show exports for the world’s third
-biggest economy rose 6.4 percent to 4.8 trillion yen in January from a
year earlier, the first year-on-year gain in eight months. Imports jumped
7.3 percent to 6.43 trillion yen.
A weakening in Japan’s currency over the past few months has helped boost
exports by making its products more price competitive overseas. But it has
also inflated the value of resource-scarce Japan’s imports of crude oil and
other commodities, which offset a recovery in demand for Japanese-made
vehicles and machinery.
The trend is hindering Japan’s long-time strategy of relying heavily on
exports to drive growth and adds to pressure for stronger domestic demand
at a time when the workforce is aging and shrinking and corporate investment
Japanese Prime Minister Shinzo Abe is expected to seek help from the US in
a visit later this week to Washington, where he plans to appeal to US
President Barack Obama for wider access to cheaper exports of US shale gas,
Kyodo News Service and other local reports said.
Abe’s office would not confirm those reports. But it did say that “the
government of Japan attaches utmost importance to the necessity of
cooperation in the areas of resources and energy, particularly considering
our current stringent energy situation,” after the March 2011 disasters.
The Fukushima Dai-Ichi nuclear accident, triggered by a massive earthquake
and tsunami, led to the closures of most of Japan’s nuclear power plants,
necessitating a sharp increase in imports of oil and gas. Abe took office
in December vowing to boost the economy by restoring Japan’s export
competitiveness, while creating demand at home with higher public works.
spending. Trade with the US and major Asian trading partners rose early
this year as the global recovery strengthened and the economic impact of
friction with China over a territorial dispute appeared to recede. But trade
with European countries was weak, with a 6 percent fall in exports from a
year earlier. Imports from Western Europe climbed 6.3 percent.
Exports to the US rose 11 percent from the year before to 839.8 billion yen
while imports rose 5.8 percent to 521.1 billion yen. That boosted Japan’s
surplus with the US by 20 percent from a year earlier to 318.7 billion yen.
Exports to China rose 3 percent but imports surged, leaving a gap of 654.6
billion yen, up 11 percent from the year before