Japan's trade deficit was a record ~30billion usd in January. The largest monthly defecit since 1979, when records were first recorded on a monthly basis. No doubt the government of the time shifted to monthly reporting in order to brag as the bubble was reaching it's peak and Japan Inc. Looked destined to rule the world. Now it's an inconvenient reminder of Japan's continued slide into irrelevance. How long before the government stops publishing these numbers I wonder?

Anyway, 18th straight month of deficits as the JPY slides to 134 against the dollar. Japan has run a trade deficit every year bar one since the GFC. People focus on the 250% of so debt to GDP or the zero rates but for me the trade deficit is far more concerning. After all, you can maintain debt with a large income. But if you have debt and your expenses exceed your income things quickly spiral out of control.

The foreign reserves have been depleted propping up a failing currency. Japan has more dry powder but there is no magic money tree. At some point you need to earn dollars to pay for energy and that means competing with more nimble and hungry Chinese and Korean competitors to sell to US and Chinese consumers.

All this while the US administration pressures puppet PM Kishida to increase taxes to pay for increased military spending. Japan desperatly needs less government, lower taxes and deregulation. The free market needs to be allowed to clear out zombie incumbents so that ambitious Japanese founders can create new companies that can get out into the world and compete. I wish we could just pay Kishida and the entire LDP to do nothing for 5 years. Just lock them in a room with a copy of Civ 5 and let them work their political magic in the "metaverse" the politicians in Japan seem so fond of.