Government data released on Wednesday morning revealed that Japan’s trade deficit increased to 993.9 billion yen (approx. 10.4 billion US dollars) in the month of May, rising just under 10% from the same month one year earlier. The Japanese Finance Ministry confirmed that this was the 11th consecutive monthly deficit, the second-longest run of shortfalls since a 14-month period between 1979 and 1980.
The only real good news in the release was that May’s deficit was much lower than originally expected, coming in under the 1.2 trillion yen that had been forecast. As has been the situation for the last several months, the rapidly weakened yen under Prime Minister Shinzo Abe’s economic recovery policy of “Abenomics” has been a boon for the exports industry, yet now takes a toll on Japan’s imports. Exports were up 10.1% to 5.76 trillion yen (60.7 billion dollars) as more shipments were delivered to markets like China and the U.S., but imports rose a near-equal 10.0% to 6.76 trillion yen (71.1 billion dollars).
A weak yen in comparison to other currencies allows exporters to make greater profits overseas, but at the same time makes the cost of imports more expensive. The import side of the equation is being plagued by Japan’s need bring in shipments of fossil fuels in order to offset the lack of nuclear energy as reactors remain offline after the 2011 Fukushima disaster. It seems Prime Minister Abe’s ruling Liberal Democratic Party (LDP) is more than ready to address this issue by pushing for a quick return to operation for the country’s nuclear power plants, despite widespread concerns over safety and strong resistance from the Japanese public.
[via The Republic]