Japan Trade Deficit: : Updated September 1, 2024

 

Japan logs 621.8 bil. yen trade deficit in July

Article Source:  https://mainichi.jp/english/articles/20240821/p2g/00m/0bu/017000c

Ideas:

There are always going to be positives and negatives related to the current account, as imports reduce the current account, while exports increase the current account.

And yes, the weak Japanese increase the value of imports, which means domestic prices will be higher, which seems to make it even harder in Japan, as inflation, since the pandemic has kept prices too high.

Japan is a resource poor country, meaning it has to import much of what it needs, which means its vulnerable to the weak yen and import prices increasing.

Japan, as any country that focuses on exporting, watches its trade balance very carefully, as exports, and especially Japanese cars, have become an economic driver for the Japanese economy, as the domestic economy seems to be stagnant or stuck, without much economic growth recently.

The other economic driver, recently, is international tourism or foreign tourists who spend a lot of Japan is Japan, as the weak Japanese yen gives them more purchasing power and they can buy more which does help the Japanese economy.

Japanese semiconductors are almost a late-comer in the semiconductor industry and South Korea and Taiwan have most of the market share.

It seems maybe the Bank of Japan, while talking about increasing the key rate, might be concerned, with exports losing the value and if the Japanese yen gets too strong it could hurt exports and foreign tourists who flock to Japan because of the weak yen. 

But that might not happen for a while as the weak Japanese yen it tied to the variance between the US rate and the Japanese rate, which is large at this time.

You would think the Bank of Japan would put more emphasis on the domestic economy, but it seems they might be putting more emphasis on anything that increases the current account, which also helps to reduce the Japanese government's huge debt.

It seems, yes exports might be stalling, as the challenge is not with the US but with China, which is going though some growing pains, as with South Korea, maybe Japan became too dependent on trade with China in the last decade.

Yes, volume is everything, while the weak yen does increase the value of exports, the volume or amount of exports is still very important.

The trade deficit, unfortunately reduces the current account, which is needed to help decrease the huge Japanese government debt, which is the highest among advanced economi

Trade with the US is going to have some ups and downs, and that is not really a major problem, as sometimes imports from the US might be more than exports to the US, as trade goes through cycles from time to time.

But trade with China seems to have stalled and might even be on a real decline, and the same in South Korea, as both countries in recent years seemed to rely on trade to and from China a little too much, maybe.

Who know when exactly when China's situation is going to improve as the Chinese economy seems to be going through a transition period at this time.

Yes, imports and exports to and from China increased, but the real challenge is exports to China which seems to be trending down a lot recently,

Trade with China is not dead, its been reduced a lot since the pandemic, and there is still the Japanese seafood ban in China, which blocks any and all Japanese seafood from entering China.

The EU or Europe is a different situation, as maybe the Ukraine war situation is hurting trade and some EU countries are almost in recession mode, compared to the US.

Have a nice day and be safe!