A Yen for Nuclear Energy: Japan’s Power Conundrum


By Javier E. David

Japan’s aggressive monetary policy and its sliding currency may have an unintended side-effect: pushing the country back into the embrace of nuclear technology, a power source the country has avoided since a nuclear disaster two years ago.

Ever since a 2011 natural disaster triggered a meltdown at Fukushima Daiichi, Japan has idled the country’s 22 nuclear reactors, which at one point were used to generate 30 percent of its electrical power. A lack of natural resources forces the world’s third-largest economy to rely heavily on imported energy, which the World Nuclear Association estimates is about 84 percent of Japan’s energy requirements.

Meanwhile, Japan’s reliance on fossil fuels and liquefied natural gas imports are eroding what used to be the developed world’s largest trade surplus. That dynamic is worsened by a weak yen—which has plunged recently as the Bank of Japan embraced money printing on steroids—that is driving up import prices.

As a result, at least one analyst believes Japan—which is the world’s largest importer of LNG, occupies the second spot in coal imports and is third only to the U.S. and China in oil imports—may have to consider a nuclear option.

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