Japan Posts Longest Run of Trade Deficits in Three Decades

Abenomics doesn’t seem to be working as Japanese February exports fell 2.9% more than expected.  In other words, Japan’s centrally-planned, mercantilist economic approach is failing.  While a pundit like Kyle Bass warns about Japan’s looming insolvency, 95% of Japan’s debt is internally owned. 

In fact, I am more concerned for Korea as the Korean economy can be easily shaken by foreign financial entities.  Korea was modeled after Japan.  The similarities between Korea and Japan are so there in terms of export-dependent industrialization strategy, technology accumulation trajectory, financial bubbles, deindustrialization, currency conundrum, demographic changes, policy mistakes (e.g., monetary policy), etc.  Korea should heed the lesson of post bubble Japan.

From Bloomberg:

Japan’s exports fell more than economists forecast and the nation’s trade deficit persisted, underscoring challenges to Prime Minister Shinzo Abe’s campaign to revive the world’s third-biggest economy.

Shipments dropped 2.9 percent in February from a year earlier, the Finance Ministry said in Tokyo today. The median estimate of 22 economists surveyed by Bloomberg News was for a 1.7 percent decrease. Imports rose 11.9 percent, leaving a trade shortfall of 777.5 billion yen ($8 billion).

http://www.bloomberg.com/news/2013-03-21/japan-february-exports-fall-2-9-with-yen-effect-yet-to-kick-in.html

From Zero Hedge:

It appears Abe and his henchmen had better stop doing things and say something as the huge devaluation of the JPY so far is NOT having the effect he had hoped for. Exports dropped 2.9% - more than expected - and while imports rose less than expected, the currency drop still meant an 11.9% surge in imports. All this means is that on a seasonally-adjusted basis, the Japanese Trade Balance just hit a new all-time record low (negative). USDJPY is strengthening on the news... it seems that well-placed non-news headline at 2am Japan time is well worth it now to cover this debacle... We assume the lesson is - just wait, "if we devalue, they will come."



http://www.zerohedge.com/news/2013-03-20/japanese-exports-drop-more-expected-smashing-adj-trade-balance-new-record-low