Japan logs 585 bil. yen trade surplus in Feb. on car, chip demand
Ideas:
Japan is a major export economy as its economy has been built on exports and trade since after the second world war.
Back then the Japanese economy might not have had much or very little domestic demand so the Japanese government decided to focus on exports to build its economy.
Japanese cars it a major driver of the Japanese as Japanese cars are in demand globally and Toyota it the largest volume producer in the world.
Recently chip-making machinery has become a major export product too as Japan decided to focus on chip-making equipment more than actually making chips as it feels behind South Korea and Taiwan in chip productions.
Electronic parts is another major export product as Japan is maybe the world leader in producing electronic parts.
Japan is a resource-poor country which means it has to import much of what is needs and with the Japanese yen being very weak, imports are now very high for Japanese businesses and Japanese households.
Some politicians want to make a big deal that the US always has a trade deficit but that is how the US economy is structured as it gets a lot of products from other countries and does export a lot of products too but the US economy has consistently been a trade deficit economy.
The Japanese economy, on the other hand, is a trade surplus country as it consistently exports more than it imports and that is fine for Japan and what the US does is fine for the US.
The current administration is not sure what its going to do with tariffs as it keep changing it mind about what to do.
Of course all businesses, globally are up in arms, as most businesses want certainty and not volatility or uncertainty and want to know what is going to happen so they can prepare accordingly.
Again, nothing has been solidified and to what is going to happen as there is just a lot of talk. Even thought the talk is strong related to Mexico and Canada and maybe even China, no one 100 percent just yet what is going to happen, as the tariff situation seems to change even monthly.
An of course Japanese car makers are not sure what is going to happen and how it will affect them in the future and what US consumers are going to do when prices are increased due to the tariffs.
Trade wars are never good for anyone as everyone loses and global trade might suffer some but it will never be completely eliminated as now all countries are interconnected and supply chains globally are too important for the global economy.
China seems to be going through a transformation period and it might take some time for the Chinese economy to get back to normal, if at all, or at least a new normal for the Chinese economy.
Most likely its not just Japan that is experiencing a trade deficit with China as maybe many countries are feeling the same thing as trade with China just isn't the same as it was before the pandemic.
Since the pandemic China just hasn't been the same as even before the pandemic there were signs of stress in the Chinese economy.
And yes, the rest of Asia seems to be back to normal as its taken a good four years since the pandemic to get back to some kind of normal, and yes, Japanese cars are leading the way as usual for Japanese exports, and chip-linked shipment are just as important as Japan has tried to get back into the chip producing game as it has fallen behind Taiwan and South Korea recently.
And as usual the EU seems to be the weak link in global trade for Japan as maybe the Ukraine war is still causing some challenges for Japan exports to the EU.
But the EU, and individual countries within the EU have been less than good in terms of economic growth for a long time and even before the Ukraine war situation.
No one knows for sure how and when the EU is going to come out of its sick-period, if it ever will but for now its the weak link in global trade.
Have a nice day!
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