Japan’s trade deficit last month 2 times higher due to energy costs

6 years ago by in Japan

Japan reported a trade deficit in October almost double compared to 2012, as the cost for the energy have risen after the accident at Fukushima.

Government figures showed that Japan logged a bigger-than-expected Y1.09tril (US$10.9bil) trade deficit last month. Last year, in October, Japan’s trade deficit was Y556.2 billion.

Energy imports surged after the 2011 Fukushima crisis forced the shutdown of Japan’s nuclear reactors. Nuclear power used once to supply a third of the country’s energy request.

“Exports were rather weak until September, but now they seem to be recovering,” said Yasuo Yamamoto, senior economist at the Mizuho Research Institute. “But imports have increased substantially, contributing to the trade deficit,” he added, according to the international press.

“I think we will be seeing the trade deficit gradually shrinking, but only incrementally, since the weaker yen is pushing up import prices,” he added.

Capital Economics, an independent macro-economic research company in London, adds: “The sharp weakening of the yen over the past year is partly to blame for the widening of the trade deficit in recent months. We expect the yen to weaken further, which should keep some upward pressure on the trade deficit, even though this should be mitigated by lower commodity prices.”