Japan's trade woes

Japan logged a record trade deficit in January, fresh statistical data from Tokyo showed on Monday. Last month's deficit came in at 1.48 trillion yen ($18.7 billion) – the highest since officials started compiling relevant figures in 1979.

The negative record came after Japan registered its first annual trade deficit in 31 years in 2011, giving rise to fears that the country was likely to see further declines throughout the current year.

Japan's overall exports tumbled by 9.3 percent to 4.51 trillion yen in January due in particular to lower shipments of semiconductors and other electronic components and devices.

"We expect this trend of deficit to continue until early 2013 with fuel demand for power generation staying strong and slow global demand and the high yen hurting exports," Barclays Capital economist Yuichiro Nagar said in a statement.

Substituting nuclear power generation

Imports in January surged by 9.8 percent to 5.985 trillion yen as purchases of natural gas and coal shot up further.

Demand for fossil fuel in the country has increased considerably since the earthquake-tsunami disaster last year which was sparked by the world's worst nuclear accident in 25 years. As a consequence, the government in Tokyo had to take many nuclear reactors offline.

Japan's surplus with the European Union last month shrank by 7.7 percent to 531.3 billion yen. Car exports to the area decreased by 29.7 percent as European demand slumped owing to the ongoing debt crisis.

Standard & Poor's on Monday affirmed Japan's AA rating with a negative outlook. The agency warned it could lower the country's sovereign rating, if the economy expanded less than expected, or if public debt continued to grow. The government in Tokyo is currently struggling to win support for higher taxes.

Author: Hardy Graupner (AFP, Reuters, AP)
Editor: Gregg Benzow