It is not a surprising topic to see after the disastrous earthquake and tsunami happened last year. We have been keep hearing that many electronics and manufactory companies was influenced. The export was weaken after the natural disaster. Also, with the shut down of several nuclear plants, the power was limited, which has brought many pause of production.
In addition, tourism has been hit too. People began to afraid of nuclear residue radiation, even dare not to buy brands made in Japan, especially food and skin care stuff.
There were also influences from strong yen and eurozone economc crisis. The article brings upm"In the latter half of the year, floods in Thailand knocked out more Japanese production capacity, while overall shipments were hurt by a strengthening yen, up 17% against the euro over that period."
There is a debate about whether this deficit will continue or not. Some think that the data already shows that in the new year, there is a obvious increase in trade. While other think that this deficit will linger.
In my opinion, this hard time for Japanese economy has not met the end yet. The influence of nuclear issue is huge. From what I know, many people already gave up buying Japan-made stuff, not to mention tourism and agriculture. Export of Japan will be absoltely hit in the coming, say 5 years. The recovery time will be longer than people thought.
2 comments:
While consumers may intend to shy away from products made in Japan, a significant amount of the Japanese manufacturing production comes from high-tech products difficult to purchase (at least with comparable quality) elsewhere. In addition, consumers (both individuals and corporations) generally have short memories when it comes to avoiding purchasing goods from somewhere, and I don't think that a ton of exports, percentage-wise, were lost for this reason.
The disruptions to Japanese manufacturing were the main reason for the deficit, and these were mostly short-term and severe. While Japan may not be back to full capacity in the next year, I expect them to recover quite well.
The article makes the deficit seem like it was brought on by the tsunami/earthquake combination, but that there were other causes. The Yen had been weakening and the government was saving less and less. The tsunami seemed more of a catalyst.
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