TOKYO, April 18 (UPI) -- Japan, faced with rising imports and the European debt crisis, Thursday reported a record trade deficit of 8.17 trillion yen ($83.5 billion) for fiscal 2012.
The figures for the fiscal year ended this March marked the second consecutive year of deficits for the world's third largest economy, which remains in the grips of chronic deflation and declining exports.
In March of this year alone, the deficit fell to 362.4 billion yen ($3.69 billion) from February's 779.5 billion yen ($7.9 billion), but was substantially higher than the 81.9 billion yen in March of fiscal 2011, the Finance Ministry said on its website. March exports were up 1.1 percent year-on-year to 6.27 trillion yen, but March imports jumped 5.5 per cent to 6.63 trillion yen.
In its preliminary figures for all of fiscal 2012, the ministry said exports were off 2.1 percent from the previous fiscal to 63.94 trillion yen, while imports rose 3.4 percent to 72.11 trillion yen. The trade deficit of 8.17 trillion yen or about $83.5 billion was up a huge 84.8 percent from the previous year.
The Japanese yen has declined sharply against the U.S. dollar in recent weeks which should help exports. However, a weaker yen also pushes up costs of imports, such as that of energy which have risen to offset the loss from the closure of nuclear power plants at home following the March 2011 quake-triggered nuclear crisis.
The festering territorial dispute with China over the Senkaku Islands in the East China Sea also has affected Japanese exports. Prior to the dispute, Japan-China trade averaged $345 billion annually.