Is Electricity Shortfall Deindustrializing Japan?

posted by Richard Katz on April 26, 2014

Found in Japan, categorized in Growth Outlook and Business Cycle

Tags: yen electricity shortfall

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One of the big topics among economists is why the 25% drop in the yen vis-à-vis the dollar has not yielded a big increase in exports, as is usually the case.


  • Despite 25% depreciation of the yen, Japan’s real (price-adjusted) exports are no higher than a year ago and down nearly 30% from their 2007 pre-recession peak
  • Real auto exports are no higher than the fall of 2012 before the deprecation began, while electrical machinery exports are down 14%
  • Meanwhile, manufacturing capacity continues to shrink
  • We suspect the shortfalls of electricity and uncertainty about future capacity has added to long-existing problems and led manufacturing firms to invest even more offshore
  • Total industrial capacity is down 10% since the mid-1990s peak
  • Non-machinery capacity is down almost a fifth
  • Automaking capacity is down 15%
  • Even electrical machinery, until recently a growth star, has been flat since the Fukushima disaster

About Richard Katz

Richard Katz is Senior Fellow at the Carnegie Council for Ethics In International Affairs, the New York correspondent for Weekly Toyo Keizai, a leading Japanese business magazine, and formerly the editor of The Oriental Economist Report, a monthly newsletter on Japan.

Mr. Katz has taught about Japan’s economy as an Adjunct Associate Professor at the New York University Stern School of Business, and as a Visiting Lecturer in Economics at the State University of New York (SUNY) at Stony Brook.

Mr. Katz is the author of two books on Japan's economic travails and has just finished a third book on reviving entrepreeurship in Japan.

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