Japan has announced its first annual trade deficit in more than 30 years, a setback for a country known for its exports including cars and electronics.
The deficit came in at 2.49 trillion yen ($32bn; £20bn) for 2011, the finance ministry said.
Japan's imports rose 12% and its exports fell 2.7%, compared to the previous year.
The decline in exports was attributed to the impact from the earthquake and tsunami on 11 March.
Struggling exportersThe deficit underscores the pressure that Japanese exporters have come under since the disaster.
Factories were damaged and supply chains disrupted for major exporters including Toyota Motor and Sony.
Exporters' problems have been exacerbated by further disruptions to production in some of their Thailand facilities due to flooding, as well by a rising yen, which makes Japanese products more expensive overseas.
The uncertainty surrounding Europe and the US has caused global investors to turn to the yen, as a safer investment, causing it to appreciate.
Analysts warned the combination of these factors was hurting Japan's exporters as rivals from South Korea and other Asian nations compete in markets which Japanese companies had previously dominated.
"It reflects fundamental changes in Japan's economy, particularly among manufacturers," said Hideki Matsumura of Japan Research Institute.
"Japan is losing its competitiveness to produce domestically."
Energy demands
On the import side of the trade balance Japan has had to increase the amount of incoming energy supplies, as the Fukushima nuclear disaster saw many atomic power stations being taken offline.
As a result, crude oil imports surged 21.3% by value, liquefied natural gas imports rose 37.5% and petrochemical imports were up 39.5% compared to 2010, government figures showed.
Nuclear power previously accounted for about 30% of electricity generation in Japan.
But since the accident, Tokyo Electric Power and other utilities have been trying to restart their conventional power plants to meet energy needs.
Bank of Japan Governor Masaaki Shirakawa said on Tuesday that the trade deficit would not become a "firmly established trend" attributing it to "temporary factors" such as the increased demands after the earthquake.
However, given that Japan's major export markets, the US and Europe, are seen going into recession some analysts are forecasting that the trade deficit will continue.
Takuji Okubo of Societe Generale in Tokyo said Japan would see a trade deficit till 2014 because of "the combination of strong demand in Japan because of earthquake and reconstruction demand and weak demand outside of Japan in Europe and the US".
bbc.co.uk
The deficit came in at 2.49 trillion yen ($32bn; £20bn) for 2011, the finance ministry said.
Japan's imports rose 12% and its exports fell 2.7%, compared to the previous year.
The decline in exports was attributed to the impact from the earthquake and tsunami on 11 March.
Struggling exportersThe deficit underscores the pressure that Japanese exporters have come under since the disaster.
Factories were damaged and supply chains disrupted for major exporters including Toyota Motor and Sony.
Exporters' problems have been exacerbated by further disruptions to production in some of their Thailand facilities due to flooding, as well by a rising yen, which makes Japanese products more expensive overseas.
The uncertainty surrounding Europe and the US has caused global investors to turn to the yen, as a safer investment, causing it to appreciate.
Analysts warned the combination of these factors was hurting Japan's exporters as rivals from South Korea and other Asian nations compete in markets which Japanese companies had previously dominated.
"It reflects fundamental changes in Japan's economy, particularly among manufacturers," said Hideki Matsumura of Japan Research Institute.
"Japan is losing its competitiveness to produce domestically."
Energy demands
On the import side of the trade balance Japan has had to increase the amount of incoming energy supplies, as the Fukushima nuclear disaster saw many atomic power stations being taken offline.
As a result, crude oil imports surged 21.3% by value, liquefied natural gas imports rose 37.5% and petrochemical imports were up 39.5% compared to 2010, government figures showed.
Nuclear power previously accounted for about 30% of electricity generation in Japan.
But since the accident, Tokyo Electric Power and other utilities have been trying to restart their conventional power plants to meet energy needs.
Bank of Japan Governor Masaaki Shirakawa said on Tuesday that the trade deficit would not become a "firmly established trend" attributing it to "temporary factors" such as the increased demands after the earthquake.
However, given that Japan's major export markets, the US and Europe, are seen going into recession some analysts are forecasting that the trade deficit will continue.
Takuji Okubo of Societe Generale in Tokyo said Japan would see a trade deficit till 2014 because of "the combination of strong demand in Japan because of earthquake and reconstruction demand and weak demand outside of Japan in Europe and the US".
bbc.co.uk
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