Japan Nov. Trade Deficit: Updated Feb. 25, 2024

 

Japan's Nov. trade deficit shrinks to $5.4 billion, exports dip

Article Source: https://mainichi.jp/english/articles/20231220/p2g/00m/0bu/005000c

Ideas:

Exports might be important in many countries but it seems Japan and South Korea place even more importance on exports as an economic driver, meaning as a way to increase economic growth.

A trade deficit is nothing to worry about, especially in Japan, which usually has trade surpluses and not deficits. The US economy is a trade deficit economy as it always has more imports than exports.

The main idea here, should be, that the deficit shrank and maybe soon Japan will get back to trade surpluses. But of course it all depend, or depends a lot on what's going on in China as China is a major trade partner with Japan, as the Chinese economy seems to be going through a period of restructuring.

Japanese auto shipments are a major economic driver for the Japanese economy, meaning its significant for economic growth.

Japan is resource-poor country and anytime the global market increases prices on oil or gas Japan seems to feel it full affects because of the weak yen, which increases the prices of imports.

Its understandable, but Japan seems to be relying on exports to the US, especially car exports to improve its economy.

If the US economy was to go through another major crisis or recession, Japan would be in trouble, as it seems the rest of the global economy is not prepared to improve anytime soon, as the US seems to be carrying the rest of the world.

The deficit might not shrink significantly anytime soon, but as long as Japan can maintain a certain level of exports it should be fine for now.

Japan exports to the US more than cars as auto parts are a major export area too. Along with car parts, Japan is a major exporter of small micro size parts, which the country is known for and many small manufacturing companies produce one product and ship it to the US.

The US Federal Reserve will reduce its key rate in 2024, but how much will that affect the Japanese yen, which is weak, at the moment, because of the variance between the US rate and the Japanese rate.

The  Chinese economy is maybe going through a period of restructuring, and who knows how long its going to take the Chinese economy to get back to some kind of normal or at least a new normal.

Ever since the pandemic the Chinese economy has not been like it was before. But maybe the changes were taking place even before the pandemic.

Japan's exports to China was down only 2.2 percent, so not all is lost as Japan should easily make that up in the next quarter, if the Chinese economy gets back to normal so some kind of normal.

Its unfortunate that China has placed a ban on Japanese seafood, as it seems more political that reasonable, as many Chinese tourists still come to Japan and eat Japanese seafood.

But unfortunately that is the situation in South Korea and Japan now, as both countries seem to have strained relations with China.

Even though there might be some political strain among countries, global trade is still strong and as companies trade with each other trade between countries will continue.

Japan trade deficit with the rest of Asia is beginning to decrease and its only a matter of time for Japan starts seeing trade surpluses on many products.

The European Union appears to be the the sick partner in global trade as maybe the Ukraine/Russia situation continues to drag down the European Union.

And Italy appears to be the sickest of European countries as its economy is very weak at tis time.

Have a nice day and be safe!