Japan has first trade deficit in 31 years

Japan, whose economy is driven largely by exports, ended 2011 with its first trade deficit in 31 years, a $32 billion gap, the government said Wednesday. The world's third-largest economy has been hit by a number of factors, including the devastation from the earthquake and tsunami last March, a gloomy world economy that has slowed its exports, and an appreciating yen that further hurts exports by making Japanese goods more expensive relative to other currencies. Japan's Finance Ministry said the balance of trade in goods suffered a deficit for the first time since 1980, with a deficit of 2.49 trillion yen ($32 billion), Kyodo News reported. Japan's exports fell 2.7 percent year-on-year in 2011, blamed on fewer shipments of vehicles to the United States and the Middle East, and semiconductors and other electronic parts to Taiwan and Singapore. Imports, on the other hand, rose 12 percent during the year, largely due to higher energy imports. The March 11, 2011, quake-tsunami devastation caused major supply chains disruptions at Japan's automakers and electronics companies. The problems have been compounded by the European debt crisis.