Japan logged a record trade deficit of ¥8.17 trillion in fiscal 2012, the second straight year of red ink, as a territorial spat with China and the European debt crisis stifled exports, with energy imports surging due to the halt of nuclear power plants, the government said Thursday.
It was the first time that the trade balance has remained in deficit for two years in a row since 1980, when the country was hit by the second oil crisis, the Finance Ministry said.
Among comparable data available since fiscal 1979, the previous largest trade deficit on a business year basis was ¥4.42 trillion logged last fiscal year.
The trade balance is unlikely to improve soon, as demand for natural resources has been growing from domestic utilities boosting thermal power generation as an alternative to stalled atomic power, following the emergency at the Fukushima No. 1 nuclear power plant, analysts said.
In addition, Prime Minister Shinzo Abe’s policy of pursuing drastic monetary easing, aimed at beating chronic deflation, could lower the yen further, pushing up import costs and preventing the trade balance from improving substantially, they added.
In fiscal 2012, the value of exports fell 2.1 percent from a year earlier to ¥63.94 trillion, down for the second consecutive year, against a backdrop of fewer shipments of vehicles and engines to China as well as of semiconductors and other electronic parts to Europe, according to a preliminary report issued by the ministry.
Japan registered its first trade deficit with the European Union in the fiscal year through March, while also posting its largest deficit with China. The trade deficit with the 27-member group hit ¥424 billion and that with China ¥4 trillion, respectively, the ministry said.
The value of imports was up 3.4 percent to ¥72.11 trillion for the third straight yearly increase as those of liquefied natural gas jumped 14.9 percent and of crude oil 5.3 percent, the ministry said.
“There remains a high bar for Japan to restart the operation of nuclear reactors, and imports of crude oil and LNG are likely to hover at high levels,” said Takeshi Minami, chief economist at the Norinchukin Research Institute.
In March alone, the balance stood at a deficit of ¥362.42 billion, marking the ninth straight month of red ink.