Tuesday, December 17, 2013

Two key reasons for Japan's record trade deficit

Japan's Ministry of Finance just released the nation's trade balance numbers, showing the trade deficit hitting a new record.

unit = ¥ trillion (source: Investing.com)

While there are a number of reasons for this trend, two key items stand out:

1. Yen weakness has not generated the expected benefits in terms of exports due to slow global growth and challenging competitive landscape.

2. Recently domestic import demand has grown considerably, as buyers try to get ahead of next April’s consumption tax hike.

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