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

Richard Katz is Editor of The Oriental Economist Report, a monthly newsletter on Japan, as well as the semi-weekly TOE Alert e-mail service on Japan, and is also a special correspondent at Weekly Toyo Keizai, a leading Japanese business weekly.

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