Japan Posts a Rare Deficit

For the first time since November 1982, Japan posted a trade deficit. This has increased worries that Japan is headed for a recession. As we talked about in class, Japan is a country that saves a lot and consumes very little which explains there constant trade surplus. So what is to blame for the change in the Japanese economy. An article published on the BBC website points to many different factors. Japan is not a resource rich country and with the rise in prices of natural resources such as oil, coal, and natural gas, has caused an increase in the imports of Japan. Also, Japan has suffered from a decrease in exports do to the down turn in the international economy. The U.S. is a major importer of Japanese goods and the demand for products has gone down especially in the area of automobiles where there has been a 21% decrease in exports. With demand already low in Japan and a worsening economic system in Europe as well which has decreased there imports, Japan very well may be headed for recession.