TOKYO — Japan has registered its first full-year trade deficit since 1980, fueling concern about the state of the world’s third-biggest economy this year.
Japan’s Ministry of Finance said Wednesday that the country logged a trade deficit of 2.49 trillion yen, or $31.25 billion, in 2011 compared with a surplus of 6.63 trillion yen, or $75.65 billion, in 2010. The shift occurred as the country boosted fuel imports to offset the loss of energy from nuclear power plants that went off line after the March 11 disasters. [Dollar figures have been converted from the yen at average exchange rates for 2011 and 2010 respectively.]
Exports, a key driver of the Japanese economy, declined 2.7 percent to 65.55 trillion yen, or $822.65 billion, last year while imports increased 12 percent to 68.05 trillion yen, or $854.03 billion.
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Japan’s fuel imports, including oil and coal, spiked 25.2 percent last year, accounting for much of the surge in imports.
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Japan’s exports took a hit on a combination of factors including a strong yen and the flooding in Thailand, a manufacturing hub for many Japanese companies.
“We attribute the drop in November real exports to the flooding in Thailand. For December, the focus had been on the rebound from this as well as the extent to which exports ahead of the Lunar New Year in Asia would provide a boost. Although real exports rose in December as noted above, the growth was insufficient to offset the declines in October and November, underscoring the fragile state of exports at present,” Nomura Bank economists wrote in a research note.
Weaker-than-expected exports in December will likely dent fourth-quarter gross domestic product, due to be released in February.
Japan’s economy rebounded in the third quarter of the year, with GDP showing positive growth for the first time since a massive earthquake and tsunami rocked the country last March. GDP grew by 1.5 percent compared to the previous quarter. GDP for the period of July to September rose 6 percent on an annualized basis.
Luxury goods companies and retailers have indicated that the Japanese market is recovering, although some players are faring better than others.
Just Tuesday, Coach Inc. said its sales in Japan for the second quarter ending Dec. 31 grew 6 percent on a constant-currency basis. Late last year, LVMH Moët Hennessy SA said its sales in Japan for the third quarter ending Sept. 30 rose 3 percent. LVMH’s full-year 2011 numbers are due Feb. 2.
Fast Retailing’s Uniqlo saw its same-store sales in Japan climb 14.2 percent in December as cold weather encouraged consumers to snap up winter clothing while Isetan Mitsukoshi and Takashimaya generated close to flat sales over the same time period.