Japan posted a trade deficit of 81.2 billion yen in electronic equipment in the second half of 2022, government data showed, marking the first time on record imports have exceeded exports for a half-year period amid a decline in the competitiveness of Japanese products.
The deficit in the balance of trade in electronics also reflects a move by Japanese manufacturers to shift their production bases overseas.
The first red ink since comparable data became available in 1988 provides a stark contrast to the 1990s, when the industry propped up the nation’s trade with an annual surplus of almost 8 trillion yen.
According to the Finance Ministry’s trade data, exports of electronic equipment in the six months through December totaled 9.23 trillion yen, up 13.9 percent from the first six months, while imports rose 17.2 percent to 9.31 trillion yen.
Imports of semiconductors and other electronic components increased as production recovered following the coronavirus pandemic, with the yen’s depreciation against the U.S. dollar also boosting imports by value.
Japan’s trade balance has been on a downward trend since the late 2000s, with the global financial crisis in 2008 spurring Japanese electronics companies to move production to countries with lower production costs.
Imports of electronics in the second half of last year increased 9.1 times while exports only increased 1.8 times, compared with the second half of 1991, when Japan logged a record half-year trade surplus of 4.17 trillion yen.
Tough competition with U.S. Apple Inc.’s iPhone and other foreign brands’ smartphones has also contributed to growing imports.
Among items with trade losses, communications equipment including smartphones posted a deficit of 1.79 trillion yen in the July-December period, followed by household appliances at 400.3 billion yen, and audio visual equipment 309.3 billion yen.
Meanwhile, semiconductors and other electronic components posted a trade surplus of 378.4 billion yen, and electric circuits and equipment 813.6 billion yen.
While some Japanese companies have been working to move production back home due to supply chain disruptions and geopolitical risks, Hiromi Oki, chief researcher at the Institute for International Trade and Investment, believes the current state of trade will not change in the future.
“Companies should instead see this as an opportunity to invest in more value-added products and strengthen technological development,” Oki said.