Balance of Merchandise Trade
Between 1960 and 1964, Japan incurred annual trade
(based on a customs clearance for imports) ranging from
million to US$1.6 billion. The era of chronic trade
in 1965, and by 1969, with a positive balance of almost
billion, Japan was widely regarded as a surplus trading
1971 the surplus reached US$4.3 billion, and its rapid
a main factor behind the United States decision to devalue
dollar and pressure Japan to revalue the yen--events that
quickly to the end of the Bretton Woods System of fixed
rates. By 1972 Japan's surplus had climbed to US$5.1
despite the revaluation of the yen in 1971.
The jump in prices of petroleum and other raw materials
1973 plunged the balance of trade into deficit, and in
deficit reached US$6.6 billion. With strong export growth,
this was reversed to a surplus of US$2.4 billion in 1976.
surplus reached a record US$18.2 billion in 1978,
considerable tension between the United States and Japan.
In 1979 petroleum prices jumped again, and Japan's
balance again turned to deficit, reaching US$10.7 billion
Once again, rapid export growth and stagnant imports
quickly to surplus by 1981. For the next five years,
surplus grew explosively, to a peak of US$82.7 billion in
This unprecedented trade surplus resulted from the
rise in exports and the drop in imports noted earlier.
these trade developments was the weakness of the yen
currencies, which enhanced export price competitiveness
dampened import demand.
After 1986 the dollar value of Japan's trade surplus
to US$77.6 billion in 1988. This decline came as the yen
appreciated strongly against the dollar (beginning in
1985) and as
a rapid rise in manufactured imports began to offset the
in the value of raw material imports. By 1990 the trade
declined to US$52.1 billion.
Underlying trends throughout the 1970s and 1980s were
fundamental strength of Japan's export sector. Under the
exchange rates of the 1960s, exports became progressively
competitive on world markets, lifting the country out of
persistent trade deficits that had continued into the
of the decade. During the 1970s, rapid export expansion
the country from the deficits immediately following the
price shocks of 1973 and 1979. Continuing export strength
drove the nation to the extraordinary trade surpluses of
as the temporary burden of costly oil imports waned.
Japan's fundamental strength in world markets required
of vulnerability and opposition to manufactured imports to
reassessed. In the early 1980s, fear of vulnerability
strong and fed the continuation of policies and behavior
manufactured imports unusually low compared with those of
industrial nations. Only with the large decline in raw
prices and the explosion of trade surpluses did policies
behavior begin to change. These changes would not
down the trade surplus, but they would help diminish
between Japan and its trading partners.
Data as of January 1994