AJC reports that 'Manufacturers have moved some production overseas to avoid the damage inflicted by the strong yen, a trend that has accelerated in recent years. Some economists say the trade balance will be in the black again within two years, but the era of very large surpluses that allowed Japan to build a huge pile of foreign reserves has ended.'
The devastating March tsunami and shift of manufacturing overseas plunged Japan’s trade account into the red for the first time since 1980. Experts said the years of Japan running massive trade surpluses are likely over.
“It reflects fundamental changes in Japan’s economy, particularly among manufacturers,” said Hideki Matsumura, senior economist at Japan Research Institute. “Japan is losing its competitiveness to produce domestically.”
“It’s gotten difficult for manufacturers to export, so they’re they’ve moved production abroad so that products sold outside the country are made outside the country,” he said.