Japan's Economy

Report Outline
Concern Over Japanese Economic Situation
Danger Signs in Japan's Trade and Economy
Outlook for the Foreign Commerce of Japan
Special Focus

Concern Over Japanese Economic Situation

Arrival of Japanese Premier Yoshida for conferences with President Eisenhower and other government officials brings to public attention the concern over Japan's economic situation that has been growing for months in official quarters. The United States and other free nations have been disturbed by the fact that, at the very time they have been striving to bolster their collective defenses in the Far East, Japan's trade and financial position has been steadily deteriorating. They realize that, unless ways can be found to avert the grave economic troubles threatening that nation, Japan hardly will be able to stand as a strong bulwark against the spread of Communism in Asia.

Yoshida's visit to the United States climaxes a good-will journey that has taken the Premier across Canada to Europe and back again in behalf of strengthened Japanese relations with the West. Highest significance, in that connection, attaches to the conversations scheduled to take place in Washington from Nov. 8 to 11. The talks are expected to cover the whole range of trade and financial questions affecting relations between this country and Japan. On their success or failure may turn the political future of the conservative Yoshida government.

Japan's Critical Economic Problems and Needs

The immediate danger for Premier Yoshida's pro-western government is an increasingly unfavorable balance of trade with the free world. Since large-scale American aid came to an end in 1951, Japan's trade deficit has been rising constantly, accompanied by a corresponding decline in the country's limited foreign currency reserves. Last year Japanese merchandise imports exceeded exports by more than one billion dollars; the trade deficit continued to increase through the first six months of 1954 despite a government-sponsored austerity program to reduce imports and curb expenditures.