Current Event # 2

"Japan, World's 2nd-Largest Economy, Reports Rare Trade Deficit"

My current event for this week is about Japan's unusual trade deficit. Japan is known world-wide as a MDC, a most developed country, and has the second largest economy. Japan makes most of its income by exporting goods to other countries and in return gains a profit. For the first time in 26 years, Japan is going through a trade deficit.

The economy's deficit was first noticed and documented back in August, 2008. Many officials believe that the deficit will be short- term and is a result of the falling car exports, rising food costs, and the increase in the cost of oil. Although many officials believe that this will surely pass, others are not so sure. The Japanese economy is decreasing at it's fastest rate in many years. Exports to the U.S. have decreased by 21.8 percent in a year and is continuing to fall. Officials believe that if this continues to occur that this will hurt the U.S. economy as well. Shumpei Takemori, an economics professor at Tokyo's Keio University, believes that if the trade deficit continues then it will cease capital accumulation here and limit the income that Japan has entrusted the U.S.'s treasury bonds. Even though Japan is facing an economy loss right now, its government will still invest in the U.S. at this point in time and hopes for the best.