Japan which according to our one report that we published the last year was expected to fare well among the developed economy is facing a huge problem of widening trade deficit. Even a weakening in the Japanese yen over the past year could not boost exports as much as hoped. At the same time oil and gas, food and other products’ imports have gone up recently.
In its estimates the last year, Asian Development Bank or ADB had predicted that the Japanese economy would be doing good this year; however, it looks the weak Japanese Yen has failed to give impetus to exports. Nonetheless, Japan’s trade deficit surged to a monthly record of 2.8 trillion yen ($27.4 billion) in January and that is a major concern.
Observers believe that the imports jumping 25 percent is a challenge for the planners.
Also, as the country faces a challenge to restore export-driven growth, the Finance Ministry reported that exports rose 9.5 percent from a year earlier to 5.25 trillion yen ($51.5 billion); however, there was a significant growth in imports which stood at 8.04 trillion yen ($78.8 billion).
When compared with the previous record monthly deficit which stood at 1.63 trillion yen, in January 2013, this looks quite large in size and that is why the government seems highly concerned about the health of the economy. According to some observers exports have suffered, meanwhile, as global growth has remained sluggish.
The Widening Gap May Give Concerns to Planners in Japan
Thus, with the global economy not in good shape also seems to have some impact on the exports from Japan. However, as the last year indicated that the country should pick up as the recovery gains momentum. At the same time it has to be remembered that the monthly numbers may well look worse before they get better.
Nonetheless, Japan’s deficit with China also surged, to a record 1.04 trillion yen ($10.2 billion). At the same time imports jumped 34 percent while exports climbed 13 percent. According to some observers a lot of problem in increasing trade deficit is that Japanese manufacturers increasingly shift production overseas.
Admittedly, as the Japanese companies are focusing on overseas manufacturing units so that they are closer to customers has contrary impact as fast-growing developing nations and to reduce their own costs, a lot of trade deficits with many neighboring countries are being seen.
To contact the reporter of this story: Jonathan Millet at email@example.com