|
Japan Balance of Merchandise Trade
Between 1960 and 1964, Japan incurred annual trade
deficits
(based on a customs clearance for imports) ranging from
US$400
million to US$1.6 billion. The era of chronic trade
deficit ended
in 1965, and by 1969, with a positive balance of almost
US$1
billion, Japan was widely regarded as a surplus trading
nation. In
1971 the surplus reached US$4.3 billion, and its rapid
increase was
a main factor behind the United States decision to devalue
the
dollar and pressure Japan to revalue the yen--events that
led
quickly to the end of the Bretton Woods System of fixed
exchange
rates. By 1972 Japan's surplus had climbed to US$5.1
billion,
despite the revaluation of the yen in 1971.
The jump in prices of petroleum and other raw materials
during
1973 plunged the balance of trade into deficit, and in
1974 the
deficit reached US$6.6 billion. With strong export growth,
however,
this was reversed to a surplus of US$2.4 billion in 1976.
The
surplus reached a record US$18.2 billion in 1978,
promoting
considerable tension between the United States and Japan.
In 1979 petroleum prices jumped again, and Japan's
trade
balance again turned to deficit, reaching US$10.7 billion
in 1980.
Once again, rapid export growth and stagnant imports
returned Japan
quickly to surplus by 1981. For the next five years,
Japan's trade
surplus grew explosively, to a peak of US$82.7 billion in
1986.
This unprecedented trade surplus resulted from the
moderate annual
rise in exports and the drop in imports noted earlier.
Underlying
these trade developments was the weakness of the yen
against other
currencies, which enhanced export price competitiveness
and
dampened import demand.
After 1986 the dollar value of Japan's trade surplus
declined,
to US$77.6 billion in 1988. This decline came as the yen
finally
appreciated strongly against the dollar (beginning in
1985) and as
a rapid rise in manufactured imports began to offset the
large drop
in the value of raw material imports. By 1990 the trade
surplus had
declined to US$52.1 billion.
Underlying trends throughout the 1970s and 1980s were
the
fundamental strength of Japan's export sector. Under the
fixed
exchange rates of the 1960s, exports became progressively
more
competitive on world markets, lifting the country out of
the
persistent trade deficits that had continued into the
early years
of the decade. During the 1970s, rapid export expansion
extricated
the country from the deficits immediately following the
two oil
price shocks of 1973 and 1979. Continuing export strength
then
drove the nation to the extraordinary trade surpluses of
the 1980s,
as the temporary burden of costly oil imports waned.
Japan's fundamental strength in world markets required
its fear
of vulnerability and opposition to manufactured imports to
be
reassessed. In the early 1980s, fear of vulnerability
remained
strong and fed the continuation of policies and behavior
that kept
manufactured imports unusually low compared with those of
the other
industrial nations. Only with the large decline in raw
material
prices and the explosion of trade surpluses did policies
and
behavior begin to change. These changes would not
necessarily bring
down the trade surplus, but they would help diminish
tension
between Japan and its trading partners.
Data as of January 1994
|
