Japan's Trade Deficit Balloons To New Record

Japan's Finance Ministry released data on Monday showing its exports grew the most in a year last month. But the country's trade deficit has reached a record high - the highest since comparable records began in 1979.



Japan logged a record trade deficit of 12.8 trillion yen ($109 billion, 97.4 billion euros) in 2014 despite a moderate recovery in exports, according to the latest figures from the country's Finance Ministry, released on Monday.



The data showed the trade deficit rose by 11.4 percent from the 11.5-trillion yen gap in 2013 - the worst shortfall since comparable records began in 1979. Exports from the world's third-largest economy grew 4.8 percent to 73.1 trillion yen in 2014, while imports increased 5.7 percent to 85.9 trillion yen.



Japan ran trade surpluses for decades, until the country was hit by huge fuel costs following the Fukushima power plant disaster in 2011. Since then, the resource-poor nation struggles to close its energy gap after the shutdown of its nuclear reactors, which once supplied a quarter of the country's power.



The problem was exacerbated by the sharp fall in the yen, which spiked the cost of energy imports purchased in foreign currencies.



Analysts said, however, the deficit is likely to narrow in the coming months, with the recent drop in oil prices and the continued rise in exports, since Japanese exports climbed twice as fast in the latter half of the year than in the first half.



Concerns about Japan's recovery have been growing since a sales tax hike in April slammed the brakes on consumer spending, driving the country into recession.



el/ng (AFP, AP, Reuters)