Japan's first trade deficit in 30 years

Units five and six of the Fukushima Dai-ichi nuclear power station are seen through a bus window in Okuma on November 12, 2011. The Fukushima disaster helped contribute to Japan's first trade deficit in 30 years.

Adriene Hill: Japan is known for the cars and TVs it sells to the rest of the world. But last year, Japan bought more stuff from abroad than it sold. It's the country's first trade deficit in 30 years.

For more we go to the BBC's Mariko Oi in Tokyo. Good morning.

Mariko Oi: Good morning.

Hill: So what's going on in Japan? Why are we seeing this trade deficit now?

Oi: Well, it's mainly because of natural disasters at home, as well as abroad. Of course, we've been following on the earthquake that happened in March, which not only damaged factories but also disrupted supply chains.

And then you have Thailand's flooding, where Japan's carmakers had quite a few factories. So those two incidents definitely had an impact on exporters, and yet, despite this natural disaster, the Japanese yen had been very strong. So the strong yen makes their products more expensive overseas.

Hill: Now is there any upside to this deficit?

Oi: From the American point of view, this is what trade representatives wanted for decades. After all, Japan invented this model -- the growth model -- led by export sectors, which has been adopted now by China and other Asian economies.

But the way that Japan fell back into trade deficit, it probably wasn't exactly what U.S. trade representatives wanted. As I mentioned, it is mainly because of natural disasters -- as well as the fact that import costs rose because Japan had to buy a lot more oil and gas in the wake of the nuclear accident at the power plant in Fukushima.

Hill: The BBC's Mariko Oi, thanks so much.

Oi: Thank you.

About the author

Adriene Hill is the senior multimedia reporter for LearningCurve.

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