Japan Records Largest Trade Deficit of $108 Billion in 2014

Japan posted a record trade deficit of 12.78 trillion yen ($108.57 billion) in 2014, as the yen’s drop and growing demand for liquefied natural gas pushed up import costs amid the prolonged halt of nuclear power plants, the government said Monday.

The previous record deficit was 11.47 trillion yen, set in 2013, the Finance Ministry said in a preliminary report, adding that the balance of trade in goods registered red ink for the fourth straight year.

Last year, imports rose 5.7 percent from a year earlier to 85.89 trillion yen, the highest since comparable data became available in 1979, with those of LNG climbing 11.2 percent, while exports increased 4.8 percent to 73.11 trillion yen on the back of the weaker yen.

The yen slid against the U.S. dollar by 8.7 percent to 105.30 from the year before on an average basis, due largely to the Bank of Japan’s aggressive monetary easing.

A falling yen usually shores up exports by making Japanese products cheaper abroad and boosts the value of overseas revenues in yen terms, though it drives up import prices. Japan depends on imports for more than 90 percent of its energy needs.

In Japan, demand for natural resources has been growing from utilities bolstering fossil fuel-based power generation as an alternative to stalled nuclear power in the wake of the March 2011 Fukushima crisis.

via Mainichi

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