Japan probably recorded its first annual trade deficit since 1963 last year, part of a shift that may see the world's largest net creditor come to rely on inflows of foreign capital by 2015, according to JPMorgan Chase & Co.
"If foreigners don't believe Japan's fiscal situation will improve, Japan could become like Greece," said Masaaki Kanno, chief economist at JPMorgan in Tokyo. "We're getting poorer as the trade deficit increases."
Japan's ability to keep borrowing costs the second-lowest in the world depends on its position as a net holder of external assets. A drop in savings as baby boomers dip into retirement funds and as a strong yen erodes company profits could push the nation's current-account surplus into a deficit, making it more expensive for the country to borrow.