"Japan is losing its competitiveness to produce domestically"
- Hideki Matsumura, senior economist at Japan Research Institute
Japan has published first annual trade deficit since 1980 putting into question how long the country can rely on exports to serve a huge public debt.
The annual deficit came in at 2.49 trillion yen (32 billion dollars) for 2011, said the finance ministry on Wednesday. Imports rose 12 per cent while exports fell 2.7 per cent, compared to 2010.
"The trade deficit is unlikely to continue widening unless crude prices continue to trend upward," said Masaki Kuwahara, an economist at Nomura in Tokyo.
"It reflects fundamental changes in Japan's economy, particularly among manufacturers," said Hideki Matsumura, senior economist at Japan Research Institute.
"Japan is losing its competitiveness to produce domestically."
© Dukascopy Bank