Japan posts a record trade deficit of $18.7 billion in January
Rise due to the increase in oil prices and increase of fossil fuel imports
Deficit fueled by the shut down of Japan's nuclear power plants
Only five reactors out of 54 still online after March 11 earthquake and nuclear disaster
Japan – battered by a strong yen, slowing global demand and increased oil and gas imports due to last year’s Fukushima nuclear disaster – posted a record trade deficit of $18.7 billion in January, according to official figures released Monday.
The record fall was stoked by greater energy imports of gas and oil following the March 11earthquake, tsunami and resulting nuclear disaster at the Fukushima Daiichi power plant, which forced the closure of most of Japan’s atomic power plants.
“The sharp increase of oil price could be the main reason of the sharp deterioration of trade balance,” said Takahide Kiuchi, chief economist for Nomura Securities in Tokyo.
Currently, only five reactors out of 54 in the country are in operation after officials allowed most to fall idle in the wake of the Fukushima disaster.
By April, if more reactors are not brought online the country will have no nuclear plants in operation, placing more pressure on its energy suppliers. Liquid natural gas imports alone climbed 28.2% year on year, according to the ministry’s preliminary report.
Last month, U.N. nuclear experts gave a thumbs-up to Japan’s planned “stress tests” for its remaining nuclear power plants to test whether they could withstand another emergency. The team from the International Atomic Energy Agency (IAEA) recommended Japanese regulators improve communication with the residents around the plants and address plans for dealing with severe accidents more comprehensively in the wake of the worst nuclear accident since Chernobyl in 1986.
Monday’s record deficit comes after Japan posted in 2011 its first annual trade deficit in 31 years, and underlines the difficulties facing the export-driven nation as it looks to rebuild.
But the world’s third largest economy faces difficult headwinds with a currency that reached record-high levels in the past year, cutting profits returning home from multinational companies and slowing demand from major trading partners such as the European Union and China.
Exports fell 9.3% year-on-year, according to figures released by the country’s Ministry of Finance Monday. The biggest drop was with China, which fell 20.1%. Exports to Europe fell 7.7%, while trade with the U.S. was up 0.6%.
January was the fourth straight month where imports outpaced exports.
CNN’s Kyung Lah contributed to this report