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Japan logs record trade deficit as imports weigh

English.news.cn   2014-01-27 11:24:48

TOKYO, Jan. 27 (Xinhua) -- Japan's import bill for 2013 was sent sky high due to increased energy shipments and the weakness in the yen also meant such purchases were notably costly, contributing to a record annual trade deficit last year, the ministry of finance said in a report on Monday.

According to the ministry, the deficit stood at 11.47 trillion yen (about 112.41 billion U.S. dollars), almost doubling the number for the previous year's 6.94 trillion yen and logging a third straight year of deficit.

Imports, the ministry's figures showed, rose 24.7 percent in December from a year earlier, compared to analysts' predications for a 26.1 percent, while exports increased 15.3 percent, with the deficit for the recording period standing at 1.3 trillion yen (12. 7 billion dollars), marking a record 18 straight months red ink.

The rise in exports missed leading economists' forecasts for a 17.9 percent increase, but marked the 10th consecutive month of gains, but at a rate still not capable of cushioning the financial blow from the ballooning import costs the nation is having to finance.

The ministry highlighted the yen's weakness that has slid against other major currencies due to inter investments by the finance ministry here and efforts by the central bank, which have seen the yen as a safe haven for foreign exchange buyers and investors looking to secure short-term positions, with the sole intention of locking in quick profits.

A weak yen is usually cheered by exporters as the value of goods and services sold in overseas markets helps boost competitiveness and the profits made augment when repatriated when the currency markets favor the yen.

However, since Japan has shuttered all of its nuclear reactors, following the multiple nuclear meltdown at the Fukushima complex in northeast Japan in 2011, and as the debate heats up at both local and central government level about the future and direction of the energy policy in Japan, there is an ever-increasing need to ship in fuel and gas due from overseas.

Japan's Prime Minister Shinzo Abe wants to restart the idle nuclear plants, but his staunch opponent, Morihiro Hosokawa, himself a former prime minister who's currently running to become governor of Tokyo, is campaigning to have a nuclear-free Japan.

Victory at the Feb. 9 election would give Hosokawa a large amount of clout to direct both local and national energy policy and both Abe and Hosokawa's antinuclear and anti-Abe supporters are aware of this, analysts have said.

But some observers like Kazuyoshi Nakata, an economist at Mitsubishi UFJ Research & Consulting Co., noted that the burden of importing fuel at such high prices could be reduced if the nuclear power plants were reintroduced over a phased period of time, Nakata said.

"Fuel import volumes will decrease if nuclear power plants are restarted, but not immediately as it depends on the pace and timing of restarts."

Things, however, will almost certainly remain the same, other analyst believe, that Japan is such a resource-poor nation and the country is currently solely reliant on imports of natural gas and fossil fuel for 90 percent of its needs, with most of the resources being shipped in regularly from the Middle East.

They added that the current nuclear impasse is prolonging Japan 's energy emergency, as even new environmentally-friendly, next- generation power generation infrastructure could take decades to implement with potential unsustainable and volatile power sources.

With the yen relatively low, thanks to Prime Minister Abe's aggressive monetary and economic policy, in twine with the central bank and the finance ministry, imports costs for oil and gas have and will continue to increase and widely contribute to such widening trade deficits, observers said.

The ministry data showed that shipments to China, its biggest trading partner, increased 9.7 percent to 12.63 trillion yen in 2013, while imports from China rose 17.4 percent to a record 17.65 trillion yen.

Shipments from Japan to the United States, meanwhile, were up 15.6 percent to 12.93 trillion yen, with imports gaining 12 percent to 6.81 trillion yen, according to the government data.

Editor: Zhu Ningzhu
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