Unprecedentedly Red

It could be a reflection of structural change in Japan economy. Trade deficit of Japan last year marked ¥11 trillion ($112 billion) last year. One may say that makes sense, because Japanese yen has been staying low against U.S. dollar. Yes, but it is only one aspect of Japan’s trade. The problem is that export has not increased very much, even followed by foreign exchanging rate. Is Japan no longer a trade nation?

Japanese yen was cheaper than a year before by 22% in 2013. That was why import of crude oil and natural gas jumped up, in spite of no big change in quantitative amounts. With discredit against nuclear power generation, Japan will not able to decrease imports of those fossil fuels, causing prolonged trade deficit.

However, export decreased in quantity, while sales hiked. Carmakers are main exporters in Japan. But exported cars last year decreased by 60 thousands, because they had moved its production lines abroad when they suffered from high yen price. Electric appliances decreased with the same reason, while lower competitiveness of Japanese products had also been indicated. High cost for electricity caused by energy difficulty also damaged factories inside Japan.

If this trend continues, money supply inside Japan will face serious difficulty, causing higher rate of long-term debt that will affect personal housing loan. Value of national bond, which consists of about forty percent of national revenue, may show steep down. There remains huge deficit in national balance.

Prescription has yet been found. “We are seeking a system for easier import of shale gas,” told Chief Cabinet Secretary, Yoshihide Suga. That was it. His idea will not contribute to structural solution of the problems in Japanese economy.

Economy of Japan in post war era has been standing on a basis supported by import of cheap raw materials and export of high quality products. Now, cheap raw materials can no longer be expected. To whom does it sell? Emerging market is waning. Only the rebuilt of U.S. economy is only a target Japan can rely on.

In this hard situation, electric companies are still reluctant to produce more renewable energy, pressuring politicians not to promote such a new business. The administration led by Liberal Democratic Party still pouring wealth into building infrastructure, which are already out of date. There will no sign of structural reform for Japanese economy, even how Prime Minister, Shinzo Abe, is yelling for need of the third arrow of Abenomics, which should be based on broad deregulation.