Japan Reports 1st Trade Deficit in 30 Years

And that could mean trouble for its national debt
By Kevin Spak,  Newser Staff
Posted Jan 25, 2012 8:40 AM CST
Japan Reports 1st Trade Deficit in 30 Years
A worker rides a motorbike at a container terminal in Tokyo, Jan. 25, 2012. Japan marked its first trade deficit since 1980, a $32 billion shortfall for 2011, the Finance Ministry said today.   (AP Photo/Junji Kurokawa)

Japan reported its first trade deficit since 1980 today, a $32 billion shortfall caused in part by the tsunami that struck the country, and in part by the strengthening yen. And while the tsunami may have been a freak occurrence, experts tell the AP that the deficit isn't. "It reflects fundamental changes in Japan's economy," one economist at Japan Research Institute says. "Japan is losing its competitiveness," with its manufacturing giants largely moving production abroad.

"We may see Japan's trade balance recover to a small trade surplus," another economist says, "but it won't return to pre-crisis levels." That's a big problem, Reuters observes, because the country relies on its once-massive trade surplus to finance its still-massive public debt. "What it means is that the time when Japan runs out of savings—'Sayonara net creditor country'—is coming closer," one equities researcher says. (More Japan stories.)

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