Japan: Economy: Annual Trade Deficit Hits A Record High

British Embassy

January 2014

Summary

Japan’s trade balance posts a record deficit in 2013. Strong demand for imported energy and a weaker currency are the main contributory factors.

Details

In 2013, Japan’s goods trade balance deficit was 11.47 trillion Yen (£67bn). This is Japan’s third  consecutive annual deficit and its largest to date. Demand for imported fuel after March 2011, coupled with a weaker Yen, are the major causes – responsible for around one third of the growth of imports. Exports over the year grew 9.5% to 69.8 trillion Yen (£410bn) and imports by  15.0% to 81.3 trillion Yen (£480bn) in value terms.  The Yen has weakened by 21.8% against US dollar over the same period.

The trade deficit for December 2013 was 1.3 trillion yen (£7.6bn). This is the 18th consecutive monthly deficit. Exports and imports grew by 15.3% and 24.7% respectively over the same period last year.

Japanese figures show its trade surplus with the UK fell by 8.1% to 443 bn Yen (£2.6bn) in 2013, as UK imports grew faster than exports (10.0% vs. 1.8% in value term) over the year.  Japan’s annual trade deficit grew to 5 trillion Yen, as imports increased by 17.4% even though Japanese exports also increased 9.7% for the first time in three years.

Comment

These figures come as no surprise given trends in the Japanese economy. It has been suggested that the Government may use the scale of the trade deficit as another reason to argue for further structural reform. Separately, Chief Cabinet Secretary Suga also pointed to the impact that imported fuel was having and reconfirmed the Government’s plans to resume nuclear electricity production once the relevant safety tests have been passed.

Disclaimer

The purpose of the FCO Country Update(s) for Business (”the Report”) prepared by UK Trade & Investment (UKTI) is to provide information and related comment to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.

Countries: Japan
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