Japan's trade deficit at record high; South Korea and US hold defense talks; Bulgaria's government resigns; senior Taliban officer arrested in Pakistan; French troops to begin pulling out of Mali; and more
Top of the Agenda: Japan Reports Record Trade Deficit
Japan's trade deficit widened to a record 1.63 trillion yen ($17.4 billion) in January as energy imports jumped (FT), highlighting the risk of reviving the country's export industry through currency-weakening policies without broader economic reforms. Japanese Prime Minister Shinzo Abe is expected to seek help from Washington during a visit later this week, when he will appeal to U.S. President Barack Obama for greater access (Bloomberg) to shale gas exports as the world's third-largest economy struggles with increasing energy costs after its 2011 nuclear disaster.
Analysis
"A weakening in Japan's currency over the past few months has helped boost exports by making its products more price competitive overseas. But it has also inflated the value of resource-scarce Japan's imports of crude oil and other commodities, which offset a recovery in demand for Japanese-made vehicles and machinery," writes Elaine Kurtenbach for the AP.
"The declared goals are ostensibly domestic in scope, but the knock-on effect on the yen has been greeted with glee by Japanese exporters such as Toyota. Japanese officials have publicly said the yen could comfortably slide further still," writes Tom Burgis for the Financial Times.
"When monetary operating systems differ, one country's unorthodox monetary policy is another's exchange rate intervention. For example, it appears unacceptable in any circumstance for Japan to buy foreign currency bonds for yen, while at the same time it's ok for countries to buy mortgage backed securities in their own currency," writes CFR's Robert Kahn.
PACIFIC RIM
South Korea, U.S. to Hold Defense Talks
South Korea and the United States will hold defense talks later this week in Washington to explore measures (Yonhap) against growing nuclear threats from North Korea in light of its third atomic test. South Korean military leaders have said they considered destroying the North's nuclear facilities.
CFR's Paul Stares highlights three things to know about the test and its implications for nuclear nonproliferation in this video.
ELSEWHERE:
Bulgaria's government resigns
Senior Taliban officer arrested in Pakistan
French troops to begin pulling out of Mali
This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org.