Japan reports first trade deficit in 30 years

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The Independent Online

Japan recorded its first annual trade deficit for more than 30 years in 2011, as the country suffered the effects of the earthquake, tsumani and nuclear meltdown and a high yen.

The deficit came in at ¥2.49trillion (£20bn), as imports rose by 12 per cent and exports declined by 2.7 per cent. It was Japan's first deficit since 1980 as the country reeled from widespread supply chain disruption in the aftermath of the tsunami and a jump in power prices as nuclear power plant shutdowns pushed up energy imports. It also suffered from a strong yen and weak global demand.

Masaaki Shirakawa, pictured, the governor of the Bank of Japan, insisted that the trade deficit would not become a "firmly established trend" because it resulted to "temporary factors" arising from the earthquake.

However, the shortfall still comes as a blow to a country, which has become regarded as a safe haven for investments. Analysts said it was important for Japan to regain its trade surplus this year to maintain the confidence of investors around the world, which the country relies on to finance its huge public debts.