Econintersect: Japan posted it's second consecutive month of trade deficit in December, reported last month by GEI News. For the year Japan's current account surplus was only ¥4.7 trillion ($50.4 billion), miniscule by past standards that have seen monthly surpluses in the 1 to 2 trillion yen range for most of the past 30 years. Factors outside of trade (net investment income and cash transfers) were positive for the year to keep the current account in surplus inspite of the trade balance deficit of $78 billion for 2012.
The following graphic from Trading Economics shows the history of the current account for Japan:
A permanent current account deficit is not generally forseen for Japan, but the good old days may not come back either. From Reuters:
"I am not expecting Japan's current account deficit will become a trend, but the surplus will probably stay at a lower level," said Yoshimasa Maruyama, chief economist at Itochu Economic Research Institute in Tokyo.
"Japan's energy imports are expected to stay high this year and next year. The recent yen decline will likely help boost exports but at the same time it will adversely impact import costs."
With the shutdown of most of the country's nuclear plants, Japan is facing the prospect of rising energy import costs as the yen weakens to improve the export situation.
- Japanese Trade Deficit at $78 Billion (GEI News, 27 January 2013)
- Record low current account surplus shows Japan's challenges (Stanley White, Reuters, 07 February 2013)
- Japan Current Account (Trading Economics, 08 February 2013)