The difference in value between what a nation exports and what it imports is its balance of payments. Japan’s economy is the third largest in the world and the nation is one of the world’s strongest exporting nations. However, Japan has been running a balance of trade deficit since 2012 as a consequence of weak global demand and the decision to take all of its nuclear generating capacity off-line in the wake of the 2011 tsunami. Whilst the Fukushima nuclear power plant withstood a much larger tsunami wave than it had been designed to cope with, the episode led to a nuclear accident in the days following the catastrophe. The nuclear reactors on-site shutdown safely within minutes of the earthquake, quenching the nuclear chain reactions in the reactor core, but the generators remained very hot. Over the ensuing days, cooling capacity to the reactors was lost and could not be restored; leading to a partial meltdown of the reactor cores and the venting of volatile radioactive gases to the environment with precipitated the evacuation of the surrounding region on a precautionary basis.

All of Japan’s nuclear power stations have been taken offline either for routine maintenance and/or safety checks and all remains cold to date. Japan had 48 NPPs which provided 30% of the nation’s electricity supply. Since the capacity has been taken offline, the shortfall has had to be met from burning fossil fuels (mainly liquefied petroleum products) which Japan has had to import, leading to the balance of trade shortfall.

However, the cost of crude oil is roughly half of what it was a year ago, meaning that Japan’s fuel bill has been significantly reduced. Also, the Yen has weakened against the Dollar, by roughly a fifth and Sterling, although the Euro has fallen relative to the Yen because of ongoing weakness in the Eurozone and fears over a “Grexit”. The relative weakness of the Yen has helped to boost the other side of the balance of payments equation; exports. Consequently, Japan has posted its first balance of trade surplus for three years in March, coming in at $1.9 billion. Exports were up by 8.5% in the year to March and imports fell by 14.5% over the year (largely due to cheaper LPP import costs), but the trade deficit for the year to March is still roughly $7.6 billion.