Japan and another monthly trade deficit under Kishida

Japan and another monthly trade deficit under Kishida

Noriko Watanabe and Kanako Mita

Modern Tokyo Times

Prime Minister Fumio Kishida took office in October 2021. Yet under his leadership, every month continues to be a trade deficit. 

Lee Jay Walker says, “Despite this, along with the mountain of debt, Kishida seeks to hike several taxes to support his doubling of the military budget rather than focusing on strengthening the economy. Hence, the possibility of increasing corporation tax is another mixed message by the Kishida administration to the business community. After all, Kishida seeks wage hikes – even if they still fall below inflation – but companies are now bracing for an increase in corporation tax to support the doubling of the military budget proposed by the prime minister.” 

Reuters reports, “Japan logged a trade deficit for a 16th straight month in November as imports surged to a record level, while subdued growth in exports to China fanned concern about how COVID disruptions there could impact other economies.”

The latest monthly trade deficit amounts to $15 billion (approximately 2.03 trillion yen). Thus every month under Kishida is witnessing a monthly trade deficit.

Imports increased by roughly 30% from the previous 12-month period. Buoyant exports to America of 32.5% – led by mining machinery and high demand for Japanese cars – were offset by minor demand in China. 

NHK reports, “Costs for coal more than doubled, with crude oil up 70 percent, and liquefied natural gas rising 52 percent.”

Kyodo News reports, “Japan was in the red for the 16th straight month and the deficit has already ballooned to 18.51 trillion yen this year, already surpassing the 12.82 trillion yen loss reported in 2014 when the deficit hit a record high, according to the ministry.”

In Tokyo (a bellwether for how Japan is doing), consumer prices in 12 months have shot up by 3.6 %. Prices of non-perishable food have risen by 6.7 % and energy prices by 24.4 % in the same timescale. This is the highest increase in four decades and sums up the current government of Japan.

Other negative economic news under Kishida concerns the decline in real wages of 2.6% from the previous period last year. 

https://www.reuters.com/markets/asia/japan-extends-trade-deficits-surging-imports-outrun-exports-2022-12-15/

https://english.kyodonews.net/news/2022/12/3004b10d2485-update1-japans-2-tril-yen-nov-red-ink-sets-stage-for-largest-yearly-deficit.html

https://www3.nhk.or.jp/nhkworld/en/news/20221215_15/

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