Japan reported its first trade surplus for half-year since the nuclear disaster in Fukushima in 2011, which was followed by rapid growth of imported energy prices and series of trade deficits. The third largest economy in the world, reported trade surplus of 1.8 trillion JPY for the period January-June 2016, compared to a deficit of 1.69 trillion JPY in the same period last year.
The sharp drop in oil and gas prices led to pressure on the trade balance of Japan, but exports are struggling to make headway after a sharp rise in the JPY, with negative financial results of some of the largest Japanese companies. The six-month surplus was the first country in the period from July to December 2010, according to data of the Ministry. The Japanese economy, which was already experiencing difficulties at the time, was seriously hit by the disaster of the earthquake and tsunami that triggered the Fukushima accident.
The nuclear disaster, the worst since the Chernobyl accident in 1986, forced the authorities to close nuclear reactors in resource-poor Japan, which turned to the production of thermal power plants and expensive imported fossil fuels to prevent energy collapse.
Falling energy prices are good news for the trade balance of Japan, but the export picture remains unstable, as the exports to key markets, such as China and USA, remains weak. The Japanese exports to China dropped by 10% in June, marking the fourth consecutive monthly decline, while the exports to USA fell by 6.5%, driven by the decrease in exports of cars and steel. The exports to both destinations declined for six months from the beginning of the year.
In June, exports to Japan dropped for the ninth consecutive month, but experts expected a more serious decline. Thus, exports decreasedby 7.4%, while analysts had expected a decline of 11.3%. Meanwhile, the imports fell by 18.8% and Japan take advantage of the current rise of native currency and lower commodity prices. The overall trade surplus amounted to 692.8 billion JPY.
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