Japan’s Trade Deficit

A consequence of “Abenomics” is now the massive trade deficit.

The Japanese Prime Minister Shinzo Abe has lead a policy to devalue the Japanese Yen to ensure Japanese exporters have an advantage with cheaper goods on the international market.  This has lead to an export boom for major Japanese firms like Toyota whose Japanese made products exported onto the international market, then command prices at much lower levels than rivals. Thus these products are cheaper and attracter buyers.

However a side effect of the weaker Yen is that imports become more expensive. So when oil and gas are rising in price on the international market, and it is these two commodities that Japan needs to import, then it means these energy products become more much expensive to Japanese importers.

The Japanese trade deficit for 2013 was £67 Billion.

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