Japan Trade Deficit: Updated Oct. 23, 2024.

Japan trade deficit in fiscal 2024 1st half widens 14.4% on weak yen.

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Ideas:

Until the yen become stronger most likely Japan is going to have a trade deficit as its a resource poor county, and has to import much of what it needs and as a result the weak Japanese yen will continue to increase import prices.

Japan is strong export focused country but for now the exports are not able to overcome the trade deficit even though there have been record exports.

Export volume might have been larger than import volume, but again the weak yen throws everything out of whack related to international trade and the Japanese current account.

Computers from the US. might not have actually come from the US but a US product made in China such as the Apple Mac Book, which might be manufactured in China, as for computers Apple is the most popular in Japan as is the I phone.

Japan, it seems, has gotten back into the semiconductor equipment and chip making business after losing market share to TSMC in Taiwan and Samsung in South Korea.

And yes semiconductor chips as again become a key export product for the Japanese economy and should continue to see solid growth in the future.

You can never count out the US, as its still the strongest economy in the world at this time and there seems to really not be any other economies that can match the US. There might be some bumps here or there but there should not be anything significant in the future.

China is a very different situation as maybe its going through a situation similar to what Japan did after it grew a lot in the 1980'as. China seems to have grown fast, maybe too fast, but maybe it has leveled off and its having some real challenges as this time.

Japan seems to be stuck in some kind of stagnation as it economy just to be very stable but at the same time never really grows that much as it might reach 1 percent or not even that most years.

As the data shows trade with the US is still robust and most likely will continue to be strong despite some who say the US is headed for a slow-down in the future. 

And has shown in the data trade with China is still on-going but of course not at the level that it was before the pandemic.

Japanese companies just need to stay the course and continue to ship to China maybe someday the largest or second largest economy will find it footing again and get back to normal or some kind of new normal for China.

The Asia-Pacific region is a large area with a  huge population so trade with countries in the Pacific area should continue to be strong as the data suggests.

However something is going on with the European Union and maybe its not just the Ukraine war as trade with the EU just isn't what it used to be.

The growth of imports of course can be attributed to the weak Japanese yen, as maybe the volume was not that much as maybe in line with the export volume from the EU.

The Bank of Japan has to decide what is best for the Japanese economy. Is it the domestic economy or is it the export focused part of the Japanese economy. The Bank of Japan seems to not be able to balance out the concerns of both groups at this time.

But to be fair, its seems the BOJ is unable, yet trying to rein in the weak Japanese yen. But again, to be fair, the BOJ doesn't want to be seen by the US as a currency manipulator, so whatever it does its keep behind closed doors and it never really talked about.

So importers feel the weak yen, and so do retail customers in Japan, while export companies feel the weak Japanese yen too but with increase profits from overseas.

The Japanese yen seems to be on a roller coaster ride, as of late, which makes companies both import companies and exports companies very uncomfortable as they sometimes don't know how to plan or manage the Japanese yen situation.

Its especially hard of small and mid-size companies who don't have the resources needed to protect themselves from the weak yen or even the volatility of the Japanese yen.

And again to be fair, the Bank of Japan doesn't want to intervene in the Japanese economy too much as too much intervention might upset the normal market mechanisms. Sometimes too much intervention is worse than no intervention.

Have a nice day!