24 Jan 2013

Japan posts record high trade deficit in 2012

7:04 pm on 24 January 2013

Japan has posted a record trade deficit for 2012, as exports to Europe and China continued their plunge.

The trade gap rose to 6.9 trillion yen for the full year, the ministry of finance said.

It comes after election promises by Japan's new Prime Minister Shinzo Abe to boost the economy, and recent monetary stimulus by the central bank.

Analysts said the deficit may have bottomed out, as exports are expected to improve in coming months.

The BBC reports the country has been hit by increased fuel imports and a drop in exports to China following the dispute over ownership of islands.

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

One of the reasons is the strength of the yen, which makes products more expensive overseas.

Japanese exporters have also been hit by sluggish demand from debt-laden Europe, as well as a territorial dispute with China, which prompted a boycott of Japanese products, such as cars, on the mainland.