Japan’s trade deficit nearly tripled in 2012 to Y6.93tn ($77bn), an unprecedented shortfall for the traditional export powerhouse that could colour debate about the so-called currency wars as Tokyo pursues policies that push down the value of the yen.
The sharp expansion of the deficit, from Y2.56tn in 2011, is a reminder of the complex challenges facing Japan’s economy and its new government, which has promised aggressive measures to end a two-decade malaise.
Shinzo Abe, prime minister since December, must balance demands to support manufacturers such as Toyota and Panasonic, whose competitiveness has been eroded by a five-year climb in the yen’s exchange rate, while avoiding a crushing increase in the cost of imported energy – goals that experts say could be difficult to reconcile.
