TOKYO — A dispute over islands with China that led to boycotts of Japanese goods, coupled with rising energy purchases to compensate for idled nuclear plants, gave Japan a record annual trade deficit last year, the government said on Thursday, in another sign of a steadily worsening trade situation for this onetime export juggernaut.

In the fiscal year ended March 31, imports exceeded exports by a margin of 8.17 trillion yen, or $83.4 billion at current exchange rates, the Ministry of Finance said. That was almost twice as large as the previous year’s deficit, also a record, and the largest shortfall since the ministry started keeping such data in 1979.

Japan’s trade balance has been hit hard since the accident two years ago at the Fukushima nuclear plant forced the nation to shut down all but one of its nuclear plants and prompted it to try to cover the resulting energy shortfall by importing more natural gas and other fossil fuels.

But even before the accident, Japan had been experiencing a steady erosion of the huge trade surpluses that it long enjoyed with the rest of the world, as Japan’s once faithfully nationalistic consumers grew increasingly hungry for low-cost manufactured goods from China. According to the ministry, surging imports of Chinese-made smartphones and computer chips helped give Japan a $40.7 billion bilateral trade deficit with China last year.

At the same time, exports to China dropped 9.1 percent as a flare-up in tensions over disputed islands in the East China Sea prompted violent street demonstrations by Chinese citizens and anti-Japanese boycotts. The declines were particularly painful for Japanese manufacturers as the fast-growing Chinese economy surpassed the United States in 2009 as the largest foreign market for Japanese-made goods.

By contrast, sales of Japanese automobiles and auto parts led a 10.4 percent rise in exports to the economically recovering United States, the ministry said. Those gains were enough to push the United States back ahead of China for the first time in three years as Japan’s largest overseas market. Japan recorded a $54 billion two-way trade surplus with the United States, the ministry said.

Thursday’s figures surprised some analysts by showing that Japanese exports did not receive a noticeable lift from the sharp depreciation of the yen under the economic recovery plan put forth by the new prime minister, Shinzo Abe, who took office in December.

A weaker yen usually helps bolster Japanese exports by making the nation’s goods less expensive than in other currencies. The ministry said that despite the yen’s declines, however, Japan recorded a trade deficit last month of $3.7 billion, more than four times as large as the trade shortfall in the same month the year before. It was the largest deficit ever recorded in the month of March, the ministry said.

Over all, Japanese exports fell last year by 2.1 percent to $652 billion while its imports rose 3.4 percent to $736 billion, the ministry reported.

Imports of fuel, which account for more than a third of Japan’s total imports, surged last year as the nation’s atomic plants remained idled from the March 2011 nuclear accident. The ministry reported a 14.9 percent increase in imports of liquefied natural gas, much of it from Qatar and Australia, and a 5.3 percent rise in imports of petroleum from nations like Russia and Saudi Arabia.

Article source: http://www.nytimes.com/2013/04/19/business/global/japanese-exports-rise-but-demand-for-goods-is-lackluster.html?partner=rss&emc=rss