japan balance of trade

japan balance of trade

Here is the key: If Japan does not maintain a trade surplus covering both interest on its national debt and bond redemptions, all hell will break loose. This gives rise to the question as to how long Japan’s vaunted export machine can remain intact. I do not have the answer to that question, but China and the rest of Asia are nibbling away bits and pieces now. The tsunami sure did not help.

Trade issues and demographics explain Japan’s paranoia regarding a strengthening Yen. It is also another one of those global imbalances that “does not matter, until it does, and it will” kind of things.

It is mathematically impossible for every country to maintain a trade surplus and increase exports, yet every country wants to do just that.

Rising interest rates would crucify Japan, and that is why Japan is courting China, hoping China will buy Japanese debt.

via Mish’s Global Economic Trend Analysis: Japan Proposes Nonsensical Deal to China: “I’ll Loan You a Nickel if You Loan Me a Nickel”; Japan Worries About Servicing Its Debt.