In a poll conducted earlier this week in the CFA Institute Financial NewsBrief, we asked readers whether they thought the Fukushima disaster will derail Prime Minister Shinzo Abe’s plans for economic reform.
After the Fukushima nuclear disaster in March 2011, Japan shut down its nuclear power fleet. This loss of nuclear power forced Japan to import substantially more oil and liquefied natural gas (LNG). The incremental demand from Japan has caused LNG prices to skyrocket to $17/mcf (thousand cubic feet) from a historical range of about $10 to $12/mcf.
This additional spending on energy imports is dragging down Japan’s current account surplus. In August 2013, Japan reported a monthly current account surplus of only 1.5 trillion yen, down 63% from August 2012. Nevertheless, in our global poll, about 63% of respondents said they believe that Prime Minister Shinzo Abe’s economic reforms will offset the consequences of the Fukushima disaster, while 32% expect the reforms to fail.
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