The weakening of the yen has caused higher prices for imported goods
Japanese authorities reported a record trade deficit of $ 112 billion in 2013. That is 65% more than in 2012. Breaking the trade balance is due to the fact that the weak national currency triggered the growth in import prices of energy resources, as reported by BBC news.
In recent years, Japan has significantly increased energy imports after the closure of all nuclear reactors due to the earthquake and tsunami of 2011.
Japan is the third largest economy in the world. Previously, the country has exceptionally high exports. However, for three years in a row the state has a record trade deficit. Over the past two decades, economic growth slows down in Japan. The Japanese currency has devalued by more than 20 % against the U.S. dollar from January to December last year.
In an attempt to change the situation, politics have developed a program to stimulate the economy, where it was planned to double the amount of money in circulation. These events affected the yen greatly. It was expected that a weakening currency will affect the growth of exports by making goods cheaper for foreign consumers. However, the depreciation of the yen triggered higher prices for imports. The volume of exports is growing not so quickly to compensate for the increasing cost of imports. This was the cause of the trade imbalance.
