Unit 1: Human Capital in Japan! (& fake girlfriends)

Just in case you didn't believe me, click here for the article that shows the population issues in Japan. It is quite a funny piece, but there is a lot of Economics behind the story.

How will the Japanese make stuff in the future?
What is happening to one of their most precious resources?

Unit 4: Weak currency increases trade deficit in Japan

I read an interesting article in 7 Days this morning about Japan's current account deficit. It highlights the issue of a weak currency actually contributing to a larger trade deficit. Click here for a bloomberg news article on the subject. (Excellent evaluative article on currency and trade deficit)

Q) Why would a weak currency make a trade deficit worse?

I welcome any comments.

Unit 4: Exchange Rates

Yen hits seven-month low after Bank of Japan measures

The Japanese yen fell to its lowest level against the US dollar in seven months, a respite for worries over the strong yen hurting exports and the economy.

Part of the reason for the fall is the Bank of Japan's surprise increase of its stimulus measures.
The yen has fallen by 3.7% against the greenback since the 14 February move.

A strong yen has hurt profit outlooks for Japanese manufacturers, with some focussing on overseas production.

Other firms had used to strong yen to go on buying sprees overseas.

The dollar stood at 80.30 yen on Thursday, having risen to 80.406 overnight - its highest since July.

The Bank of Japan (BOJ) expand its asset purchase programme by 10tn yen ($130bn; £83bn) in an effort to boost growth.

The BOJ also left the cost of borrowing unchanged at between zero and 0.1%.

The BBC's Tokyo correspondent Roland Buerk says another factor is the strengthening of the US dollar, after better than expected economic data out the US.

But he says the yen's decline may not alleviate the troubles of Japanese businesses just yet.

"Back in 2007 the yen was at 117 to the dollar not 80 like it is today, so while some depreciation like this is welcome it probably doesn't go far enough for exporters."

Carmakers, such as Toyota, Honda and Mitsubishi, have been some of the worst hit by the strong yen as it makes their products less competitive abroad.

Unit 4: Trade Deficit in Japan

Japan's trade deficit hits record high on fuel imports

Japanese carmakers have been among the worst hit by a strengthening yen and natural disasters








Continue reading the main story Related StoriesJapan's cabinet approves tax riseJapan economy worse than forecastJapan PM Noda in tax reform call

Japan's trade deficit surged to a record high in January as a strong yen hurt exports and its nuclear crisis resulted in increased fuel imports.

The deficit stood at 1.5tn yen ($19bn; 12bn) as exports dipped 9.3% from a year earlier, while imports rose 9.8%.

Fuel imports went up because most of its 54 nuclear reactors were shut after the earthquake and tsunami last March.

Japan has also been hurt by a slowdown in its key export markets such as the US and the eurozone.

"Special factors such as the earthquake last year, the nuclear problem and a temporary slowdown in the global economy as well as Japan's new year holiday came together and pushed down the trade balance," said Takeshi Minami of Norinchukin Research Institute.
Nuclear impact

Continue reading the main story “Start QuoteImports are likely to remain high due to solid demand for imports of fuel for electricity and brisk imports of parts”
The earthquake and tsunami on 11 March last year caused substantial damage to the Fukushima Daiichi nuclear plant, resulting in radiation leaks at the facility.

Some 80,000 people had to be evacuated from the surrounding areas. The leaks have raised concerns about the safety of nuclear energy in the country.

As a result the majority of Japan's nuclear plants have been shut and utility providers have had to turn to traditional thermal power stations to generate electricity.

These power plants need natural gas and coal to operate, resulting in a surge in imports of these commodities.

Imports of natural gas surged by 74% in January from a year earlier, while coal imports rose more the 26%, Japan's Ministry of Finance said.

Double whammy?

Japan's exports have been hurt by a strong yen, which has risen more than 7% against the US dollar since April last year.

A strong currency makes Japanese goods less attractive to foreign buyers as they have to pay more for them.

Analysts also say that a strong yen had resulted in Japanese firms sourcing more parts from outside Japan, which had resulted in increased imports and impacted the trade deficit.

They said this trend was likely to continue in the short term.

"Imports are likely to remain high due to solid demand for imports of fuel for electricity and brisk imports of parts," said Yoshimasa Maruyama of Itochu Economic Research Institute.

"Taking these factors together, a trade deficit will persist at least through the first half of this year, and how it narrows will largely depend on the recovery of overseas economies such as those in emerging markets in Asia."