Toshisada UtsunomiyaImpact of Japan's Nuclear Shutdown on the Macroeconomy, 2011–2024
This paper examines how Japan’s post-Fukushima nuclear shutdown affected itsmacroeconomy over the period 2011–2024. It focuses on the transmission mechanism fromthe loss of nuclear baseload power to higher energy imports, a persistent trade deficit, anddownward pressure on the yen.Using trade and energy statistics for 2011–2024, the paper argues that the suspension ofnuclear reactors significantly increased Japan’s dependence on imported LNG and coal. This,in turn, worsened the trade balance and contributed to a structurally weaker yen, amplifyingthe domestic impact of global energy and food price shocks. Japan’s experience offers acautionary case study for other countries considering large, rapid shifts in their energy mixwithout simultaneously securing alternative domestic capacity.The analysis is deliberately simple and stylised. It does not claim that energy alonedetermines the exchange rate. Rather, it shows how the nuclear shutdown created abackground of continuous energy-related outflows that interacted with monetary policy,global financial conditions and capital flows to shape the trajectory of the yen between 2011and 2024.
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