The yen fell to a two-month low against the dollar following news that Japan had recorded its first yearly trade deficit since 1980. Japan’s manufacturing sector is still struggling with problems stemming from last year’s earthquake and ensuing tsunami with some large production facilities still offline.
The drop in production has impaired sales of Japan’s products – particularly automobiles – and global inventories for some products are still below normal levels. The resulting drop in sales has impacted Japan’s trade balance and is responsible for the current trade deficit.
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