http://qz.com/47198/japans-gaping-trade-deficit-isnt-catastrophic-yet/
This article discusses one of the major economic challenges that Japan is currently facing - a rapidly increasing trade deficit. The country has not had to face a trade deficit since 1980, until 2011. Since then, the trade deficit has steadily grown, faster than initially anticipated.
The nature of Japan's economy makes it important for them to maintain a healthy balance of trade and this recent data impresses the need for Japan to increase its exports. The article also proceeds to mention possible reasons for the trade deficit, some of which the government can take steps to affect and others which are outside their control.
Maybe weakening the Yen will assist in increasing exports by making the Japanese currency more competitive in the global market. In addition, the potential growth of demand for Japanese products from the United States and South-East Asia will probably help. However, it is unlikely that Japan's energy imports will decrease any time in the foreseeable future and it is doubtful that demand from the Eurozone will spike soon. The steps Japan takes to control its trade deficit and their effectiveness will say much about the direction the economy will take.
This article discusses one of the major economic challenges that Japan is currently facing - a rapidly increasing trade deficit. The country has not had to face a trade deficit since 1980, until 2011. Since then, the trade deficit has steadily grown, faster than initially anticipated.
The nature of Japan's economy makes it important for them to maintain a healthy balance of trade and this recent data impresses the need for Japan to increase its exports. The article also proceeds to mention possible reasons for the trade deficit, some of which the government can take steps to affect and others which are outside their control.
Maybe weakening the Yen will assist in increasing exports by making the Japanese currency more competitive in the global market. In addition, the potential growth of demand for Japanese products from the United States and South-East Asia will probably help. However, it is unlikely that Japan's energy imports will decrease any time in the foreseeable future and it is doubtful that demand from the Eurozone will spike soon. The steps Japan takes to control its trade deficit and their effectiveness will say much about the direction the economy will take.
Very nice article which reminds readers that the U.S. is not the only major county in the world facing drastic deficit problems. It is not very surprising that Japan has come to to face such a large deficit. The country is physically very small but has an extremely dense population, being in the top 10 most populated countries annually. Japan doesn't have the agricultural resources to provide for each of their citizens and has to import almost all of its natural resources because very few are found in Japan. These imports have been cancelled out by the large exports of high quality technology and cars. However, when the economic crisis hit the world, many people cut spending on Japanese goods such as high priced technology and cars. Hopefully, with the strengthening of the economy, Americans will start to have more disposable income to spend on Japanese luxury items.
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