Japan probably produced its first trade deficit last year in more than three decades as energy imports surged to cover for the loss of nuclear power following the Fukushima disaster, a major blow to an economy built on its exports prowess... Official trade figures due for release on Wednesday are expected to show that Japan swung to a deficit for the first time since 1980, as utilities purchased fossil fuels for power stations to make up for the loss of nuclear power.Such a situation will cast int doubt the ability of the nation to finance its ballooning national debt with external surpluses:
Economists say Japan's trade will be in deficit for the next few years as it copes with the Fukushima catastrophe that released radiation into the atmosphere and forced most nuclear power stations to shut in the face of a public outcry over safety. Trade will then return to a surplus, but long-term trends suggest the surplus will weaken anyhow. A rise in the yen to a record last year of fewer than 77 per dollar from more than 250 in 1980 is making Japanese exports increasingly uncompetitive and so encouraging manufacturers to move overseas.
The argument that Japan can rely on surpluses from its international trade to offset a large public debt could also look less convincing and lead some investors to bet that a funding crisis will come sooner than originally expected.In reality, the student (South Korea) may have already surpassed the master (Japan) in the exporting prowess realm