Lili Park
Vice President, Client Service
Get to Know Lili
This week’s Chart of the Week chronicles Japan’s trade deficit over the last five years. In the graph, the red line represents Japan’s month-end trade balance, while the charcoal line is the 100-day moving average of the trade balance. Most important in the chart is that Japan logged its first annual trade deficit in more than 30 years for 2011, as measured by the aggregation of month end trade deficits (note that although month-end trade deficits were larger in late 2008 and early 2009, the total trade balance for each of those years was actually positive). The 2011 trade deficit of 2.49 trillion yen (approximately $32 billion) is due at least in part to the March earthquake and tsunami, which paralyzed production/exports and provoked a surge of costly fuel imports to cover for the loss of nuclear power. Shortly after the March 2011 earthquake devastation, Japanese exports – the leading engine of Japan’s economic growth the last six years – declined 12.0% in April, and continued to decline in May. Furthermore, a persistently strong yen contributed to the reduction of total exports by 2.7% since last year while imports surged by 12%.
In terms of market impact, the emergence of a trade deficit in Japan leaves to question how much longer the country can fund its gross national debt, currently just under 230% of GDP, without reliance on foreign investors. If exports continue to fall and imports rise, the need for foreign investment will increase. However, foreign investors are unlikely to accept the low yields of the past, so a rise in rates for Japanese debt would seem probable.
12.04.2023
With movie awards season around the corner, some entertainment pundits may use the term “category fraud” to describe races in…
11.30.2023
The holiday spending frenzy is well underway as some of the biggest shopping days of the year, including Black Friday…
11.16.2023
October proved tumultuous for investors as all major U.S. equity indices were negative and the CBOE VIX Index, which serves…
11.08.2023
Earlier this year, the regional banking crisis and eventual collapses of Silicon Valley Bank, Signature Bank, First Republic Bank, and…
11.01.2023
U.S. equities declined for the third consecutive month in October amid an environment of higher yields and underwhelming earnings reports…
10.25.2023
A few weeks ago, the Bureau of Labor Statistics reported that total nonfarm payrolls rose by 336,000 during the month…
Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.
We respect your privacy. We will never share or sell your information.
If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.
Contact Us >