Japan trade gap hits record 5.4t yen

Tokyo

BAD news continued to dog Japan's embattled economy as it was announced on Wednesday that the nation logged a record trade deficit of some 5.4 trillion yen (S$64 billion) for the first half of fiscal 2014. The news came a day after the government downgraded its assessment of the economy for a second consecutive month.

The deficit was nearly 9 per cent higher than in the first half of the preceding fiscal year and reflected a continuing surge in import costs on the back of a weaker yen, although exports showed some improvement towards the very end of the period.

The sharp weakening of the yen, since Bank of Japan governor Haruhiko Kuroda launched a massive quantitative and qualitative monetary easing operation in March 2013, has inflated import costs without producing a corresponding increase in exports, which are being hurt by weak global demand. The central bank is coming under increasing fire from critics as a result, as are the wider economic policies of Prime M…