Home > Statistics > Handbook > Chapter 11 Trade, International Balance of Payments, and International Cooperation
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A chemistry experiment at Namaacha Secondary School in Mozambique. JICA sent 1,482 Japan Overseas Cooperation Volunteers to developing countries in fiscal 2007.
Japan has continued to produce a trade surplus since 1981. In terms of Japan's international trade on a customs clearance basis in 2008, exports (in FOB value) showed an annual decrease of 3.5 percent to 81.0 trillion yen, the first decrease in seven years. Imports (in CIF value) grew by 8.0 percent to 79.0 trillion yen, thus increasing for the sixth consecutive year. As a result, Japan's trade surplus decreased for the first time in two years, falling by 80.9 percent from the previous year to 2.1 trillion yen.
Japan's 2008 exports decreased by 1.9 percent from the previous year in terms of unit value index (the first decrease in five years), and decreased by 1.5 percent from the previous year in terms of quantum index (the first decrease in seven years).
Japan's 2008 imports rose by 8.6 percent from the previous year in terms of unit value index (an increase for the fifth consecutive year), but decreased by 0.7 percent from the previous year in terms of quantum index (a decrease for the second consecutive year).
Japan's 2008 exports totaled 81.0 trillion yen. By item category, transport equipment accounted for 24.8 percent of the total export value, followed by 19.7 percent in general machinery and 19.0 percent in electrical machinery. Motor vehicles, which are in the transport equipment category, constituted 17.0 percent of the total export value, up 1.8 percent in quantity but down 4.1 percent in value from the previous year. One characteristic of Japan's exports is an increasing proportion of high value-added products manufactured with advanced technology, such as motor vehicles, steel and integrated circuits.
The total value of Japan's 2008 imports was 79.0 trillion yen. By item category, mineral fuels accounted for 35.0 percent of the total import value, followed by 10.9 percent in electrical machinery, and 9.3 percent in manufactured goods (iron and steel products, non-ferrous metals, textile yarn and fabrics, etc.). Crude and partially refined petroleum, which are in the mineral fuels category, constituted 20.6 percent of the total import value, up 0.9 percent in quantity and 32.4 percent in value from the previous year. Energy resource imports increased greatly in value in 2008, with crude oil being the foremost example. Japan's chief imports used to be energy resources and raw materials, though the proportion of product imports is gradually on the rise due to the further industrialization of the Asian region and overseas production relocations by Japanese companies.
Japan has maintained a trade surplus with Asia, the U.S.A. and the EU, while has been in a continuous deficit with the Middle East and Oceania.
Japan's 2008 trade balance with the U.S.A. was 6.2 trillion yen in surplus, smaller than the previous year (down 27.8 percent from the previous year). Exports (in FOB value) amounted to 14.2 trillion yen (down 15.9 percent, recording a decrease for the second consecutive year); major contribution for the drop was in transport equipment and general machinery. Imports (in CIF value) totaled 8.0 trillion yen (down 3.7 percent), marking the first drop in four years; the decrease was due mainly to the contributions in electrical machinery and general machinery.
Japan's 2008 trade balance with the 27 member countries of the EU registered a narrowed surplus of 4.1 trillion yen (down 12.6 percent). Exports (in FOB value) totaled 11.4 trillion yen (down 7.8 percent), due mainly to the contributions for the drop in general machinery and transport equipment. Imports (in CIF value) totaled 7.3 trillion yen (down 4.8 percent), because of contributions for the drop in general machinery and transport equipment, etc.
Japan's 2008 trade balance with Asia resulted in 7.9 trillion yen in surplus, the first decrease in two years (down 10.2 percent). Exports (in FOB value) totaled 40.0 trillion yen (down 1.1 percent), marking the first drop in seven years; this was mainly due to the contributions for the drop in electrical machinery and chemicals. Meanwhile, imports (in CIF value) amounted to 32.0 trillion yen (up 1.5 percent), still on the continuing upward trend in recent years; this was mainly attributed to the growth in mineral fuels and chemicals.
Of particular note, imports from mainland China have expanded so dramatically in recent years that China replaced the U.S.A. in 2002 as the largest exporter to Japan; imports from China in 2008 was 14.8 trillion yen. In 2007, China replaced the U.S.A. as Japan's biggest trading partner with its combined value of imports and exports, even though the exports value to China was smaller than that to the U.S.A.
Japan's current account has consistently recorded a surplus in recent years. In 2008, the surplus narrowed for the first time in three years to 16.4 trillion yen, down 33.9 percent from the previous year. A breakdown of Japan's current account showed that its trade balance was 4.0 trillion yen, down 67.3 percent from the previous year and marking the first surplus decrease in two years. Also shown is that the services balance was 2.1 trillion yen in deficit, the first decrease in deficit in two years. The income balance decreased by 3.0 percent over the previous year to 15.8 trillion yen, the first decrease in surplus in six years.
On the other hand, the balance of the capital and financial account registered the fourth consecutive year of deficit (excess outflow), being 18.4 trillion yen in the red.
Japan's foreign assets (the balance of overseas assets held by residents in Japan) as of the end of 2008 amounted to 519.2 trillion yen, while its foreign liabilities (the liabilities of residents of Japan to non-residents) was 293.7 trillion yen. As a result, Japan's net foreign assets (foreign assets minus foreign liabilities) reached 225.5 trillion yen, marking the first drop in three years.
Japan's foreign reserve assets remained at around $220 billion during the period from 1996 to 1998. However, they started to increase rapidly from 1999, reaching $1,030.6 billion at the end of 2008. This represented an increase of $57.3 billion (5.9 percent) from the end of the previous year.
The yen became super-strong against the U.S. dollar in Spring 1995, hitting a high of nearly 80 yen. The trend subsequently shifted to a progressively weaker yen, which eventually reached 143.79 yen in July 1998. After hovering between the 100 and 120 yen ranges for the most part since 1999, the yen began appreciating sharply in late 2008 and marked 89.51 yen in January 2009. As of the end of June 2009, the rate was 95.56 yen.
International cooperation donors are becoming increasingly diverse: official development assistance (ODA) by the government, direct investments and export credits by private corporations, donations by nonprofit organizations, aid activities by NGOs and volunteer citizen groups, etc. In addition, there are various forms of assistance, including bilateral assistance and assistance through multilateral institutions.
In the ODA framework, Japan has contributed to the growth of developing countries as the world's number-one ODA donor for ten consecutive years up until 2000. Recently, however, Japan's ODA budget has been declining because of the country's severe economic and financial situation. Its 2007 ODA spending (on the basis of net disbursement at current prices) was $7.7 billion, down 31.0 percent from the previous year. Reasons include smaller contributions to multilateral institutions, etc. and the absence of any major debt relief, such as that granted to Nigeria in 2006.
In 2007, the 22 member countries of the Development Assistance Committee (DAC) of the OECD provided $103.5 billion in ODA. Of this total, Japan's ODA contribution accounted for approximately 7 percent, making Japan the fifth-largest contributor behind the U.S.A., Germany, France and the U.K. The ratio of Japan's ODA to Gross National Income (GNI) was 0.17 percent, or a decrease of 0.08 percentage points compared with that of the previous year.
Of the $7.7 billion in ODA provided by Japan in 2007, $5.8 billion or 75.2 percent was bilateral ODA (down 20.4 percent year-on-year), and $1.9 billion or 24.8 percent was ODA contributed through multilateral institutions (down 50.9 percent).
Bilateral ODA provided in 2007 consisted of $3.4 billion in grants-in-aid, $2.6 billion in technical cooperation, and negative $0.2 billion in loans, etc. (negative value indicates a larger amount of repayment received in 2007 than the amount lent in the same year).
By region, bilateral ODA (including aid to Eastern European countries and graduated countries) was distributed as follows: Africa, 29.1 percent; Asia, 28.0 percent; Middle East, 16.2 percent; Latin America, 3.9 percent; Europe, 1.9 percent; and Oceania, 1.2 percent.
Bilateral ODA in 2007 (including aid to Eastern European countries and graduated countries) was broken down by purpose (on a commitment basis) as follows: 27.2 percent for improving the social and administrative infrastructure (including education, water supply and sanitation), followed in descending order by economic infrastructure, and then the production sector.
In addition to the monetary assistance described above, Japan has promoted the development of human resources and transfer of technology through its ODA activities. This plays a vital role not only to help nation building of developing countries but also to further bilateral understanding.
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