Japan’s trade surplus recorded a huge decline of 85.6% during the first half of fiscal 2008 as a result of the falling demand for Japanese products in the international markets.
According to the Finance Ministry, trade surplus of Japan slumped 85.6% to 802 Billion Yen in the first half of fiscal 2008 (April-September 2008) as compared to the first half of fiscal 2007, as reported by Xinhua. It is recorded as the lowest trade surplus for a six-month period since the later half of fiscal 1981, when the oil crisis hit the country badly.
However, exports increased 2.5% to touch 42,904.3 Billion Yen and imports elevated by 16.1% to reach 42,102.3 Billion Yen during the same period. Japan’s trade surplus fell down by 94.1% to come at 95.1 Billion Yen in September 2008 from $16.34 Billion on a YOY basis. Also, in August 2008, Japan suffered a trade decline of 327.56 Billion Yen.
The slump recorded in the trade surplus of Japan is chiefly due to the declining demand of Japanese products in the overseas markets. The fall in Japanese products is induced by the economic crisis prevailing worldwide. Further, the high value of Yen, in comparison to the major currencies like the US Dollar and Euro, contributed significantly to the fall in Japanese exports.
Moreover, the shooting costs of the imported energy sources, such as oil, coal and natural gas, and other raw materials have made the expenses on imports to soar. Consequently, the trade surplus of the country came down.
It is noteworthy that Japan has apparently no natural energy resources and it primarily depends upon the Middle East for its oil and gas requirements. This leads to the increase in the production cost of the Japanese products. As a result, these products are facing negligence in the international markets.
The Japanese economy is being forced into recession by the declining exports and slumping trade surplus as these are lowering the annual trade income of the country. The export-based economy of Japan is expected to show more instability in the coming time with the deepening of the global economic crunch.
According to a Research Analyst at RNCOS, “The Japanese trade surplus is showing a steep decline corresponding to declined exports and increased import value. The fall clearly implies that the export industry of Japan, one of the leading economies of the world, is going through its worst phase. It will directly impact the leading industries of the country as they’ll get less due to falling exports.”
