Japan's trade deficit rises to new high

JAPAN logged a record trade deficit of nearly 11.5 trillion yen (S$143 billion) last year, as the surging cost of imports arising from a sharp drop in the yen's value more than overwhelmed the benefits of its rising exports on the back of the weaker currency.

The deficit, two-thirds larger than the one in 2012, underlines the acute dilemma facing Prime Minister Shinzo Abe's government, which is seeking to restart nuclear reactors to cut the surging costs of imported fossil fuels in the face of strong domestic opposition.

Japanese exports are not gaining by as much and as quickly as hoped from the weaker yen; this is partly because soft overseas demand has limited export volumes and means that some companies are striving to retain market share rather than reap the full advantage of the depreciation of the yen.