25 Jan 2013

Record trade deficit posted by Japan

5:34 am on 25 January 2013

Japan has posted a record trade deficit with the rest of the world in 2012, importing more than 6.9 trillionyen ($US78 billion) more in goods than it exported.

Exports have been falling for seven consecutive months. Shipments fell 5.8% in December, compared to the previous year.

The BBC reports that one of the reasons is the strength of the yen, which makes products more expensive overseas.

Exporters have also been hit by sluggish demand from Europe, as well as a territorial dispute with China, which prompted a boycott of Japanese products on the mainland.

However, the Ministry of Finance has reported improved figures for December.

Earlier this week, the Bank of Japan doubled its inflation target to 2% and said it would implement open-ended asset buying from 2014.

Imports rose 1.9% in December compared to the year before, with energy imports swelling 34%.

Japan has had to import fuels from abroad after nuclear power plants were taken offline following the earthquake and tsunami on 11 March, 2011.

Japan previously relied on nuclear energy for about 30% of its power generation. The rise in energy imports was one of the main reasons Japan posted trade deficit in 2011, its first in more than 30 years, of 2.56 trillion yen.