Days of Japan as Super-Exporter Over?

The Japanese economy has been dependent on its export sector for decades and, in truth, this will likely be the case for some time to come. But there are changes underway that will have a lasting impact on the way the nation conducts its business.

The trade deficit last year was as wide as Japan has seen in its history. The advent of “Abenomics” was supposed to boost the economy with increased domestic demand and improve the standing of the country’s trade balance with a lower valued yen. The yen has not dropped enough and the Japanese consumer has not spent enough. At the same time, the country has been buying more and more energy to meet its needs. This is what happens when the nuclear power operations shut down and a nation devoid of gas and oil has to import more of both.

Japan wants to see the growth of the domestic side of the economy but that is going to require a cultural shift that will be anything but easy. In the meantime, the export sector has to continue to carry the load and, thus far, it has not been able to. Most of the problem is that Japan’s trade partners are weaker than they have been. That results in far slower growth for Japan’s export-centered companies.

- Armada Corporate Intelligence

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