Japan’s economy finally had a trade surplus as cheaper oil prices and a weaker yen boosted exports. After the earth quake in March 2011, Japan had to shut down Nuclear plants that accounted for a third of the energy production in the country. they had to resort importing alternative power resources. A fall in commodity costs has eased import levels and Japan has finally reported a surplus. Cheap petroleum prices have also helped as well as a weak yen has made exports higher. Economists predict that this surplus will not be able to last long, especially if oil prices bounce back.
http://www.bbc.com/news/business-32408371
http://www.bbc.com/news/business-32408371
6 comments:
The earthquake in 2011 really hurt Japan's economy but it is finally making a comeback. We are seeing a bit of growth compared to previous years, and although experts are not hopefully, I think this is an indicator of Japan's near future. Japan has been selling an increased amount of cars over the years, and it is helping to boost their economy.
PM Shinzo Abe also purposefully weakened the yen to increase exports.
Is this a similar policy to what China has been implementing?
What happened to Japan in 2011 is very unfortunate. However, it is good to see that the country has finally achieved a trade surplus. Weakening the yen to facilitate trade will be very beneficial to the country in the short-run. However, when the country gets to a better economic state they will have to strengthen the yen because the weakening of the yen now may not be sustainable in the long-run. Japan needs to be careful when managing their monetary and fiscal policies.
Once there is higher demand of Japanese Yen, the currency will appreciate, which will leads to trade deficit again.
Chase makes an interesting point. They will need to alter their currency in order to optimize their trade power. It is a very good sign for Japan to be in a surplus not long after their disaster.
I agree that the surplus would not remain stable because it was induced by oil price fluctuation. Japan needs to find an alternative solution to their trade deficit. A weaker yen is a good strategy but that's not enough
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