Analysis of Japan’s Trade Percentage over Gdp

Analysis of Japan’s Trade Percentage over GDP

Japan’s economy plays a prominent role in the ASEAN region; in the areas of business, politics; Official Development Assistance and more interestingly, economic health (Ng & Yeats, 2002; Yasutomo, 1989; Okita, 1999). Japan’s economic recovery from WWII from the 1950s is nothing short of remarkable in the early 1980s, thus earning Japan’s title as one of the four Asian tigers (Krugman, 1994; Johnson, 1982). Today, Japan’s economy is facing an economic downturn with a huge trade deficit that signals a troubling situation since the bubble (Bernanke, 2005). Japan was also a subject of continued criticism in manipulating trade competitiveness for nearly two decades through frequent intervention in the foreign exchange markets. Yet Japan has argued its stance as a country and an economy which has a high dependency on international trade competitiveness for its livelihood, and its only goal is to maintain currency stability (McCulloch, 1985).

Trade Trends: Imports & Exports

Import percentage of GDP is shown in Graph A and clearly indicates a downward trend from 1980 at 14.37% to 1987 at 7.21%. A slight rise in imports is seen in the following year at 7.64 and for the next few years imports gradually climbed and peaked at 1990 at 9.38 percent before continuously falling for the next three years to 6.87% at 1993. The next climb in imports is seen in 1994 at 7.01% and a gradual increase is seen over the next 3 years at 1997 when imports peaked at 9.66%. There was a slight decrease in 1998 at 8.91% before growth peaked up in 1999. The years 1995 and 2004, signify relative stagnant percentage while fluctuated above 7% and below 9%. Nonetheless, the fluctuations showed a gradual climb throughout the years; small increases. The climb continued progressively to 2008 at 17.52%. Import percentage over GDP plunged in 2009 to 12.33% and rose to 13.95% the following year. The year 2011 marked the start of a trade deficit which continued on to 2012. Import percentage was seen overtaking exports at 16.06% (0.91% above exports) in 2011. And in 2012, the gap continued at (0.98%) with imports at 16.64% and exports at 14.66%.

Trends in the