Japan: Trade Balance Deficit Increases 19%

August 20th, 2014
in econ_news

Econintersect:  An unexpected rise in imports has pushed the Japanese trade breaking-news-130px7balance deeper into deficit.  The deficit of ¥946 billion ($9.2 billion) was the largest in the last four months.  Imports increased 5.9% from ¥6,764 billion ($65.8 billion) in June to ¥7,162 ($69.7 billion) in July.  A slight decline had been expected.  Exports rose modestly from June's ¥5,940 billion ($57.8 billion)  to ¥6,189 billion ($60.2 billion) in July 2014.  This was a pretty good number however.  It was the highest level in five months and the third highest in 27 months.

Follow up:

Exports were up 3.9% from a year earlier while imports rose by 2.3% Year-over-year.  Even though that sounds as if the balance of trade is not getting  much more negative, the accumulation of deficits over the past 12 months totals ¥11.2 trillion ($109 billion), an increase of 19% over the accumulated deficit of ¥9.4 trillion ($91 billion) for the 12 months ending July 2013.

The biggest actor in the widening trade deficits is the need to import fossil fuels after Japan shut down its nuclear reactors following the Fukushima nuclear meltdown in 2011.  In the coming year Japan is planning to bring two nuclear generation facilities back on line and that should decrease slightly the fuel component of the trade deficit.  However, it will be a number of years before the effect will become significant - Japan took 38 nuclear reactors off line and they will be coming back very slowly .






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