Japan announces first trade deficit since 1980
Japan marked its first trade deficit since 1980, a 2.49 trillion yen ($32 billion) shortfall for 2011 caused in part by last year's tsunami and the rising value of the yen, the Finance Ministry said Wednesday.
Government data released Wednesday said the value of Japan's exports fell 2.7 percent to 65.55 trillion yen ($843 billion) for 2011. The drop was attributed to the economic impact of the March 11, 2011 earthquake and tsunami and the rise in the value of the yen against the U.S. dollar, along with a gloomier outlook in the global economy.
In December, the trade balance was a deficit of 205.1 billion yen, according to the Finance Ministry figures.
The data underscore the growing pressures facing the world's third-largest economy, which relies heavily on exports to drive growth. A persistently strong yen, Europe's debt problems and the recent flooding in Thailand are eroding gains made since the March earthquake in Japan disrupted manufacturing.
The turmoil in Europe and the U.S. has driven up the yen as global investors flock to the currency as a relatively safe haven. The yen hit multiple historic highs against the dollar this year.
A rising yen shrinks the value of overseas earnings when repatriated and makes Japanese products less competitive in overseas markets. The yen has weakened to around 77 to the dollar recently, but exporters say it is still too high.
The currency levels have forced manufacturers including Nissan Motor Co. and Panasonic Corp. to shift some production overseas, a trend that could further undermine Japan's exports.