Japan's trade deficit increased by nearly 10% in May to 99.39 billion yen (nearly $ 10.5 bn), highlighting the challenges of Prime Minister Shinzo Abe (Shinzo Abe) facing the industry are increasingly turning to the revitalization of manufacturing production to overseas.
Ministry of Finance reported on Wednesday, as the yen rising import costs cheap exports that match 10 percent from a year earlier rebound.
Weak Hong Kong dollar, the yen has pushed up the value of this resource-poor countries crude oil, natural gas and other commodities import costs, but the May deficit larger than most economists expected.
More powerful imports from the Middle East and China exports to the United States, China and elsewhere in Asia offset by strong growth.
Despite strong import that the recovery in domestic demand in Japan, the deficit growth shows that Japan's trade environment has changed for the better, says Eiji Ogawa, Hitotsubashi University in Tokyo economist.
"Not long ago, Japan has been in surplus," Ogawa said Wednesday at a meeting. "It is now clear deficit is not temporary, but structural."
Japan's economy in the first quarter of this year, a 4.1% annual rate of growth and sustained recovery forecast for this year, thanks to the government's economic stimulus spending and aggressive monetary easing policy, aimed at ending two decades of stagnation.
But continued growth will increasingly depend on cash rich companies in Japan to do more hiring and spending at home - a tough sell in Japan rapid population aging and shrinking.
May data showed Japan's efforts to promote trade with the rest of Asia are yielding results, exports rose 11 percent to 320 trillion yen (33.7 billion), imports grew nearly 10 percent to 2.98 trillion yen (31.4 ten one hundred million U.S. dollars).
China's exports in May rose 8.3 percent from a year earlier to 1.05 trillion yen ($ 1.1 billion), while imports rose 15 percent to 1.46 trillion yen ($ 15.4 bn), leaving 410 one billion yen (about $ 430 million) deficit.
More and more Japanese companies are expanding their manufacturing in Southeast Asia and South Asia, some tap new, fast-growing market and some have a huge commitment in China, the threat of action against Japan, as festering territorial disputes, to hedge against the risk Beijing .
Economists say Abe promised tax cuts need to move forward and deregulation in order to stimulate investment and hiring by the enterprise rigid labor laws and high taxes and wages, hurting their competitiveness complain.
"Companies think it's better in the overseas production and profit repatriation," Ogawa said, adding, weakening of the yen to help, but can only provide a temporary respite from the Japanese called "hollowing out" of the industrial base.
"Exchange rate changes will not bring back the Japanese factories," he said.
Yen has been devalued more than 20% against the dollar and the euro since late last year, in turn pushing up the relative value of other currencies. Its decline is due to market speculators expectations and monetary policy between the large amounts of cash into the economy.
Wednesday U.S. dollar transactions, approximately 94.5 yen level.
Japan's trade surplus with the United States over the previous year increased by 26 percent to 42.71 billion yen (about $ 450 million). Export growth of 16.3%, compared to 1.04 trillion yen ($ 10.9 bn), imports grew by 10% to 614 one billion yen (about $ 65 billion). However, exports to the EU fell by 5%, while imports grew by nearly 9%, an increase of nearly 650 percent of the Japanese deficit 88.7 one billion yen ($ 933.7 million).
Overall, exports grew by 10.1%, compared with 5.77 trillion yen a year earlier in May (60.7 billion), while imports soared 10 percent to 6.76 trillion yen ($ 71.1 bn), according to the Ministry of Finance preliminary data.
Japan, in May 2012 the trade deficit was 90.793 billion yen, while the deficit in April was 87.99 billion yen.
The deterioration in the trade balance in Japan after the nuclear power plant shut down after the March 2011 accident at the Fukushima Daiichi plant surge in demand for oil and gas. Installation costs on imported fuel in the defense case of the government nucleophilic restart more factories.
In May, from the Middle East, mainly crude oil and natural gas, imports grew by 11.5%, from last year's 1.23 trillion yen ($ 12.9 bn).
Although many people believe that Japan needs to shift to renewable energy faster, more aggressive, others say that nuclear energy is necessary Abe's policy to succeed, because the company said that high energy costs are a factor driving them offshore.
"Given Japan's natural resources are limited, it will be necessary to rely on nuclear power for some years at least," Ya Kichikawa said Bank of America Merrill Lynch economist in Tokyo.
 



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