Japan’s Economy: Production, Exports Growing

In December 2023, industrial production in Japan increased by 2.4% compared to the previous year’s results. But according to forecasts by Japanese financial services firm SMBC Nikko Securities for January 2024, “the outlook does not appear too bright.” First of all, Japan’s economic performance may be affected by problems in the auto industry after the scandal with the manufacturer Daihatsu, which falsified crash tests and was forced to suspend production. In addition, the decline in international demand for “made in Japan” cars, fierce competition from Chinese manufacturers, and the withdrawal of Japanese automakers from Russia as part of the G7 sanctions policy – all these negative factors will continue to affect the economy of the Land of the Rising Sun.

As for the other 2023 results, Japan, on the contrary, documented record exports. The world’s third-largest economy exported 100.88 trillion yen ($682 billion) worth of goods and services last year, up 2.8% from 2022. Exports of automobiles rose 32.7% year-on-year, while exports of construction and mining equipment rose 16.2%. According to international economists, this growth was made possible “especially due to the weakness of the yen compared to other major world currencies.”

Regarding imports in 2023, they totaled 110,170 billion yen ($745.6 billion), down 7% from last year. Thus, the trade account for 2023 closed with a negative balance of 9,290 billion yen ($62.9 billion). In 2022, Japan’s negative foreign trade balance was 20,000 billion yen ($135 billion). In December alone, Japanese exports rose 9.8 percent year-on-year to 9,600 billion yen ($64.9 billion), while imports fell 6.8 percent.

Finally, according to preliminary data, consumer prices in Tokyo, the capital of Japan, rose by 1.6% in January, the lowest in two years and for the first time below the value “programmed” by the Central Bank of Japan (2%) and also below the forecasts of economists.