Business/Finance

Japan trade deficit balloons as fuel imports surge

Monday, February 20, 2012

Japan posted a record high trade deficit in January after its nuclear crisis shut down nearly all the nation's reactors for tougher checks, sending fuel imports surging. Exports were hurt by a strong yen and weak demand.

The 1.48 trillion yen ($18.7 billion) deficit reported Monday highlights Japan's increased dependence on imported fuel after the March 11 earthquake and tsunami sent the Fukushima Dai-ichi nuclear plant into multiple meltdowns.

As public worries grew, nearly all the 54 nuclear reactors in Japan were stopped for inspections. The government wants to restart at least some of the reactors, after checking for better tsunami and quake protection.

Resource-poor Japan imports almost all its oil. Until the Fukushima disaster, the country had trumpeted nuclear technology as a safe and cheap answer to its energy needs.

Now, Japan is importing more natural gas and oil as utilities boost non-nuclear power generation. Imports of natural gas in January vaulted 74 percent from a year earlier and imports of petroleum jumped nearly 13 percent.

Increased energy imports contributed to Japan last year recording its first annual trade deficit since 1980. Analysts have said Japan may return to a trade surplus in 2013.

There was bad news for Japan's manufacturing powerhouses, with a strong yen and sluggish global economy contributing to slowing exports.

Exports declined 9.3 percent in January from a year earlier, particularly in computer chips and electronic parts. Imports in January grew 9.8 percent.

The swelling trade deficit is a rare turn of events for Japan, which for decades had been criticized by its allies, including the U.S., for huge surpluses and for allegedly carrying out unfair trade.

Japan's trade deficit with neighboring China, its biggest trading partner, has also been growing recently.

Japan's trade deficit in January was the biggest for any month in the more than three decades since officials began compiling such figures in 1979.

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