本文报道了日本不断恶化的贸易赤字超过预期。这主要是由于他们的货币的相对强度和疲弱的全球经济前景。然而,它也有一部分归因于更高的能源价格,作为化石燃料的进口增加了在2011的核危机和随后的放弃核电。这种贸易不平衡的持久性威胁到日本的经济复苏,因为他们的经济主要是由出口驱动的。日本经济的持续复苏取决于全球需求。
The article reports the deteriorating trade deficit in Japan which had increased to ¥907.26 billion in May, exceeding forecasts. This is mainly due to the relative strength of their currency and the weak global economic outlook. However, it is also partly attributed to higher energy prices, as imports for fossil fuels had increased in the wake of the nuclear crisis in 2011 and the subsequent abandonment of nuclear power. The persistence of this trade imbalance threatens the economic recovery of Japan as their economy is driven primarily by exports. Any sustained recovery of the Japanese economy depends on global demand.
Key Concepts
Exchange rates
The exchange rate is the price of one currency in terms of the other. For example, if the exchange rate of the Singapore dollar vis-à-vis the Malaysian ringgit SGD/MYR is 2.4978, one Sing dollar gets 2.50 ringgit at the current spot rate. A stronger currency make goods from abroad more attractive and render domestic goods for the rest of the world less competitive. Hence net exports tend to decrease when a country's currency becomes stronger, affecting aggregate demand and hence, economic growth.
There are 3 exchange rate systems in the world.
Flexible exchange rates
Exchange rates under this regime is entirely determined by demand and supply in the foreign exchange market. The government does not intervene to affect the exchange rate.
Graphically, the equilibrium in the foreign exchange market is where the demand curve for the domestic currency intersects the supply curve of the domestic currency:
1
Fixed exchange rates
This is where the exchange rate is fixed by the government and it is maintained by the central bank at its pre-determined level by buying or selling the foreign exchange reserves. Many countries have abandoned using fixed exchange rates because they lose control of domestic interest rates. However, Hong Kong still operates under a fixed exchange rate regime to the US dollar.
Crawling peg exchange rates
This is somehow similar to the fixed exchange rate, however it is not fixed to just that country currencies. It will be determined by the government and it might changed in fixed or random interval. Often, the developing countries will use this crawling peg exchange rates trying to control the inflation.
There are several factors that affect the exchange rate:
Price level differences between two countries
A country with a lower inflation rate compared to another country tend to have a stronger currency and their purchasing power increases when inflation is low. Intuitively, when prices rise more slowly, buying power of the country is maintained. (6 Factors That Influence Exchange Rates)
Interest rates
Higher interest rates attract investors due to higher yield. Hence, a country with a higher interest rate compared to another tend to attract foreign capital and hence, demand for its currency and this leads rising currency value. (6 Factors That Influence Exchange Rates)
Current account balance
A country running a current account deficit means that i
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