Japan records a trade deficit for the third straight fiscal year despite recovering exports

[Ahlevah]

TOKYO -- Japan recorded a trade deficit for the third straight fiscal year as the costs of energy and other imports rose and the yen remained weak.

The deficit was 5.89 trillion yen ($38 billion) for the fiscal year that ended in March, according to Finance Ministry data released Wednesday.

Japan records a trade deficit for the third straight fiscal year despite recovering exports

Japan recorded a trade deficit for the third straight fiscal year as the costs of energy and other imports rose and the yen remained weak

abcnews.go.com

By itself, a 5.89 trillion yen trade deficit isn’t a fatal problem. I mean, the U.S. has run a deficit in its current account and been a net debtor nation for years. But Japan’s problem is that nagging 131 trillion yen national debt coupled with a fatal demographic situation. The country is dependent almost entirely on imports, and as the yen weakens as carry traders continue to sell it coupled with a deteriorating trade situation we can see that this has the potential to morph into something much bigger, as in a world-wide financial or banking crisis. Powell‘s jawboning on “higher for longer” isn’t helping, and yen bears in the forex markets continue to stare down the Bank of Japan in the face of its threats to intervene in support of the beleaguered currency:

ORLANDO, Florida, April 15 (Reuters) - Hedge funds have built up their biggest bet against the yen in 17 years, raising the prospect that when Japan's embattled currency does rebound from its 34-year low against the dollar, the short-covering rally could be a powerful one.

The latest Commodity Futures Trading Commission data show that speculators' net short yen position is the largest since June 2007, and one of the biggest since yen futures contracts were launched in 1986.

But much of Wall Street, while noting the more rapid decent of the yen and Japan’s deteriorating trade position, seems completely oblivious to the threat of a significant currency devaluation:

"The leveraged community has the bit between the teeth, is earning carry and capturing gains, in the face of a finance minister who is big on watching the FX market and short on action," Societe Generale's Kit Juckes wrote on Monday.
"We think the yen is very oversold here, but decades of overshoots tell us to be patient," he added.

https://www.reuters.com/markets/funds-make-biggest-bet-against-yen-since-2007-mcgeever-2024-04-15/

 

[Lord Tammerlain]

With the yen decline in USD terms the German economy is now larger than Japan's and South Korea's GDP per capita is now on par with Japan.


Japan's unwillingness to allow " zombie companies " to fail during the 90s to now really hurt it's competitive edge. It's companies despite how many Japanese embrace technology have stuck to traditional ways, heck many still use fax machines.


I do not see a bright future for Japan, without some serious government policy changes

 

[ThirdTerm]

The biggest trade deficits were in the Middle East, mainly Saudi Arabia and the United Arab Emirates, meaning that the main cause is oil imports. Oil prices have climbed over the past few years, spurred by concerns over supplies and geopolitical risks, including wars in Ukraine. Aside from that, Japan needs a regime change. The LDP-led coalition is expected to lose badly in the next general election and the current administration is approved by only 15% of the public, which is a historic low. The party was founded by Nobusuke Kishi, who has been exposed as a CIA asset in recent years.

THE CIA AND JAPANESE POLITICS​

Chalmers Johnson, Norbert A. Schlei and Michael Schaller

Asian Perspective
Vol. 24, No. 4, Special Issue on Dysfunctional Japan: At Home and In the World (2000), pp. 79-103 (25 pages)
Published By: The Johns Hopkins University Press

 

[Kushinator]

By itself, a 5.89 trillion yen trade deficit isn’t a fatal problem. I mean, the U.S. has run a deficit in its current account and been a net debtor nation for years. But Japan’s problem is that nagging 131 trillion yen national debt coupled with a fatal demographic situation. The country is dependent almost entirely on imports, and as the yen weakens as carry traders continue to sell it coupled with a deteriorating trade situation we can see that this has the potential to morph into something much bigger, as in a world-wide financial or banking crisis. Powell‘s jawboning on “higher for longer” isn’t helping, and yen bears in the forex markets continue to stare down the Bank of Japan in the face of its threats to intervene in support of the beleaguered currency

This shit again?

A trade deficit simply (it is far more complicated and well above your level) a matter of changes to savings. In this regard and given Japan's fiscal deficits, it means more government debt will be purchased by the other side of the import trade i.e. the entities exporting goods and services and importing yen.

Lastly, a weakening Yen is only going to boost exports and imports, or increase trade.

 

[Ahlevah]

This shit again?

Yeah. The yen is still dropping—like a stone.

A trade deficit simply (it is far more complicated and well above your level) a matter of changes to savings. In this regard and given Japan's fiscal deficits, it means more government debt will be purchased by the other side of the import trade i.e. the entities exporting goods and services and importing yen.

I posted this on the 17th, but it was serendipitous that you would wait until today to respond, because guess who I saw on CNBC tonight talking about the yen and America’s bifurcated economy, where the rich get richer and everyone else gets the shaft? (He also gave airtime to mentioning Japanese pensioners who are getting poorer, too.) None other than our old friend, Kyle Bass!

Lastly, a weakening Yen is only going to boost exports and imports, or increase trade.

You know, in theory things would work just like they did in my Paul Samuelson Economics textbook, but these central bankers and politicians have been messing with the formulas. Instead of repatriating the money back to America, what if the Japanese just pretend they’re Americans and lend the dollars themselves, especially since they have their own credit line at the Federal Reserve?

I’m curious to know what the total exposure of Japanese banks to stretched overseas property markets like China and the U.S. are. One European former hedge fund manager said a lot of the recent selling of the yen in favor of the dollar is being done by institutions with considerable exposure to these markets that are seeking to satisfy counterparty demands on their dollar loans because they don’t trust the collateral. Already years ago the Bank for International Settlements and S&P Global noted this lending as a potential vulnerability to the Japanese financial system:

Large Japanese banks could be susceptible to a global economic downturn after having ramped up their exposure to risky assets in international capital markets, economists said, while noting the country's diverging path from the more cautious global banking environment.

Total outstanding cross-border claims of Japanese banks reached $4.7 trillion in the first quarter, a rise of some $2 trillion since the subprime crisis of 2008, according to the Bank for International Settlements. The country's banking sector is now the largest provider of foreign funding, having stepped into the breach left as European banks reduced their own exposure following the global financial crisis.

https://www.spglobal.com/marketintelligence/en/news-insights/research/yield-seeking-japanese-banks-exposed-to-china-risk-in-postcrisis-world

I mean, maybe they've reigned in their risk profile since then, but I doubt it. It isn't in the nature of financiers to not be greedy.

 

[Kushinator]

Yeah. The yen is still dropping—like a stone.

You didn't even address anything you quoted, and proceeded to rant over my post.

I don't care about your opinions or predictions... they always turn out to be shit not are you able to articulate the subject matter without rambling on in a prophetic doomsday tirade.

Japan has the lowest interest rates in the world. So the Yen has declined considerably given the rest of the world has tightened. Wow! How interesting

I will repeat: you've been wrong about everything.

Here's the part where you talk about your wall street adventures.

 

[Ahlevah]

You didn't even address anything you quoted, and proceeded to rant over my post.

I try to pick through your comments to find a nugget worth responding to, but when you start your post with “This shit again?” it gets difficult.

You make everything sound so tidy, just like the day your Econ professor presented it to you in class. What western governments are supporting today isn’t capitalism, but a form of statist corporatism aided and abetted by central banks. This system they’ve devised, which seeks to essentially repeal the business cycle with concepts like “too big to fail” and “free” helicopter “stimulus” money, has set up one of the greatest wealth transfer programs in history via the debasement of currency and support of two economies: one for poor people who rent virtually everything they possess or consume, and another for rich people who own all of the assets, productive or not.

Japan has the lowest interest rates in the world. So the Yen has declined considerably given the rest of the world has tightened. Wow! How interesting

Japan had the lowest rates when the yen traded for a long time in a range around 110 to the dollar. Something fundamental is changing, because it’s weakening rapidly against virtually every other major currency. And it’s also interesting that the BoJ keeps threatening intervention but isn’t doing it. Why not? Is it because there is an unwinding of counterparty risk related to overseas bank lending in troubled property sectors taking place? Or is it because it would blow a hole in the country’s budget thanks to a ridiculous cost of debt service, which would further undermine confidence in the currency? Or maybe it doesn’t think it would be effective past a few days? Or is it a combination of the these or even something else? Is it possible for you to control your insults for a moment to actually contribute something constructive to this discussion?

I will repeat: you've been wrong about everything.

So says the guy who thinks everything is peachy keen in this economy.

 

[Kushinator]

I try to pick through your comments to find a nugget worth responding to, but when you start your post with “This shit again?” it gets difficult.

You post the same boring shit.

You make everything sound so tidy

Because i don't adhere to your doomsday nonsense? Get real!

Something fundamental is changing, because it’s weakening rapidly against virtually every other major currency.

Again... the Yen is weakening because you get a better return in other markets. This isn't something profound.

And it’s also interesting that the BoJ keeps threatening intervention but isn’t doing it. Why not? Is it because there is an unwinding of counterparty risk related to overseas bank lending in troubled property sectors taking place? Or is it because it would blow a hole in the country’s budget thanks to a ridiculous cost of debt service, which would further undermine confidence in the currency? Or maybe it doesn’t think it would be effective past a few days? Or is it a combination of the these or even something else? Is it possible for you to control your insults for a moment to actually contribute something constructive to this discussion?

Japan has been trying to weaken their currency for over 30 years. They still have a demographic issue that cannot be tackled through economic policy. They need to allow immigration or it will continue to be a challenging environment.

I'm not insulting you. Your posts are terrible because you refuse to learn.

So says the guy who thinks everything is peachy keen in this economy.

I think you just want to bitch and moan when Republicans lose elections.

 

[Ahlevah]

You post the same boring shit.

Likewise, your insults are getting a bit tedious. I only indulge you because on occasion you post something approaching an actual intelligent point, but my best market advice these days revolves around the idea that your stock is sinking. For example, I laid out on the table the idea that Japanese banks pose a potential systemic problem to the world’s financial system, and I get back crickets. I can’t help it if that’s boring you. I don’t have time to waste on your shit either.

 

[ralfy]

Might be the effects of late capitalism. Similar has been taking place for the U.S., with trade deficits starting in the 1970s.

 

[Kushinator]

I don’t have time to waste on your shit either.

What shit?

I do not habitually cheerlead about weakness in some link of the global economy. That's you. I try to correct for nonsense.

You've been wrong. Will you own it? Will you learn as to why?

This time it's different.

 

[Ahlevah]

You've been wrong.

About what? Slowing GDP? Rising credit card and auto loan delinquencies? Stubbornly high inflation and interest rates? Not one net full-time job in almost a year? Lowest level of existing home sales in thirty years? Bubble asset prices? Deficits as far as the eye can see? Rising auto inventories?

Will you own it?

Give me $16 trillion and I’ll bet I can grow the economy and inflate the price of everything, too.

Will you learn as to why?

Government jobs and spending.

By the way. The yen just went over 160.

 

[Kushinator]

About what? Slowing GDP?

Are you serious?

Rising credit card and auto loan delinquencies?

What does this mean? Without context you're just throwing shit.

Stubbornly high inflation and interest rates?

Again... Huh?

CPI is below the 70 year average, which is influenced by historically low rates post-2008.

Not one net full-time job in almost a year?

We've been through this. You're trying to aggregate monthly household survey data because it fits a narrative. When the data doesn't mold, you'll claim it's fake.

Do not play the data game. You will lose again.

Lowest level of existing home sales in thirty years?

Bubble asset prices?

You opinion is of little value.

Deficits as far as the eye can see?

This has always been the case.

Rising auto inventories?

Give me $16 trillion and I’ll bet I can grow the economy and inflate the price of everything, too.

A pandemic isn't something to **** around with.

Government jobs and spending.

By the way. The yen just went over 160.

You're not profiting. Why do you care. A weaker Yen is better for everyone as it is more reflective of the Japanese situation. Shame it took 30 years and a pandemic.