In 2011, Japan posted its first trade deficit in 31 years as energy imports soared following the shutdown of nuclear power plants after the Fukushima disaster. In 2012, that deficit was 1.7 times higher, in a shocking and painful development for a country dependent on, and reputed for, its quality exports.
But the journey from a trade surplus of 6.63 trillion yen ($73.67 billion) /quotes/zigman/4868099/sampled USDJPY in 2010 to a deficit of ¥6.93 trillion in 2012 was now unlikely to be reversed, even if the clock could be turned back two years to the pre-earthquake (and pre-nuclear-crisis) era, according to research released Friday.
Citigroup economists Kiichi Murashima and Naoki Iizuka wrote in a report that even if Japan imported the same volume of LNG as it did in 2010, and at the same average prices as in that year, its 2012 trade deficit could still have been lowered by only ¥3.7 trillion.
“In our view, diminishing competitiveness of Japanese products (both price and non-price competitive edges) likely have played a role in the recent weakness in the trade balance,” they said.
Citing the example of communication instruments (including mobile phones and smartphones), and audio-visual apparatus (including televisions), Murashima and Iizuka said Japan’s trade performance in both product categories has deteriorated over the past five years.
“These two categories alone depressed the trade balance by ¥3.1 trillion in the past five years,” they said.
– V. Phani Kumar
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