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News Release

Medium-term outlook for Japan’s trade balance — Surplus emerging into the mid-2010s —

March 26, 2012

Overview

 In 2011, owing to supply constraints caused by the Great East Japan Earthquake, the slowdown in foreign economies, the strength of the yen and the rise in the prices of natural resources, Japan’s trade balance of trade turned to a substantial deficit of –¥2.5 trillion, which some observers expect to grow farther.
 However, a medium-term simulation based on export and import function estimates suggests that income factors against a backdrop of growth of foreign markets will help to boost exports, and that since there is little prospect of growth of Japan’s domestic markets, there is little likelihood of a surge in imports. If a major rise in natural resource prices can be avoided, Japan’s trade balance is likely to turn positive by around the mid-2010s.
 This simulation is based on the assumption that Japan maintains its current level of international competitiveness. If Japan’s competitiveness declines, it is possible that export stagnation will lead to the establishment of a trade deficit. To maintain a trade surplus in the medium term, it will be necessary to make further efforts to enhance competitiveness, such as developing products tailored to the needs of the export destination and securing overwhelming technological superiority.

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