Japan probably produced its first trade deficit last year in more than three decades as energy imports surged to cover for the loss of nuclear power following the Fukushima disaster, a major blow to an economy built on its exports prowess.

For decades Japan used an exports-orientated economic policy to build up global brand names such as Toyota, Sony and Canon and a manufacturing might that was the envy of the world.

Official trade figures due for release on Wednesday are expected to show that Japan swung to a deficit for the first time since 1980, as utilities purchased fossil fuels for power stations to make up for the loss of nuclear power.

Economists say Japan's trade will be in deficit for the next few years as it copes with the Fukushima catastrophe that released radiation into the atmosphere and forced most nuclear power stations to shut in the face of a public outcry over safety.

Trade will then return to a surplus, but long-term trends suggest the surplus will weaken anyhow. A rise in the yen to a record last year of fewer than 77 per dollar from more than 250 in 1980 is making Japanese exports increasingly uncompetitive and so encouraging manufacturers to move overseas.

Japan can continue to export goods, but if you focus exclusively on the trade balance, then the days as an exporter are ending, said Seiji Adachi, senior economist at Deutsche Securities.

The argument that Japan can rely on surpluses from its international trade to offset a large public debt could also look less convincing and lead some investors to bet that a funding crisis will come sooner than originally expected.

Last year I thought we could continue to finance our debt for 10 years. Now I think it's seven years, Adachi said.

Trade data for December and 2011 as a whole is due on Wednesday at 8:50 a.m. (Tuesday 2350 GMT). Adachi forecasts a 2011 deficit of 2.4 trillion yen (20.0 billion pound).

That would be the first shortfall since a 2.6 trillion yen deficit in 1980, one ironically also caused by a jump in oil import costs when world prices rose.

Since then Japan has been able to rely on exports of goods, including its iconic autos, MP3 players, computer chips and in recent years games consoles, to produce one trade surplus after another.

ENERGY NEEDS

Liquefied natural gas imports jumped to a record last year as utilities turned to gas-fired power generation to plug the gap left by the shutdown of most nuclear reactors after the March 11 earthquake caused the worst nuclear disaster in 25 years.

Japan, the world's third-biggest oil consumer, has also seen import values rise due to high crude prices. Assuming that oil prices remain high, this could also keep Japan in a trade deficit for the next few years, economists say.

The trade deficit could narrow to 1.9 trillion yen in 2012 and then widen to 2.2 trillion yen in 2013, Adachi said.

In addition to energy imports, a surge in outward-bound mergers and acquisitions by Japanese firms will also lower export volumes as manufacturers go abroad, Adachi said. They are also expanding production to overseas locations rather than in Japan.

Years of trade surpluses and a high savings rate among Japanese fuelled confidence that the country could comfortably service its mounting debt, which has reached twice the size of its $5 trillion economy, the biggest burden among industrialised nations.

Japan has avoided the sell-off in its sovereign debt that has become common in debt-stricken Europe.

One reason, analysts have often cited, is that running a trade surplus makes Japan a creditor to other nations. Hefty holding of overseas assets by Japanese investors also helped give Japan a high credit status.

Economists have predicted that as the Japanese population ages and the savings rate falls that these surpluses could swing to deficits.

A shift from nuclear power generation could prove expensive enough to hasten the oncoming of Japan as a deficit nation and increase the need for tax hikes and spending cuts to lower outstanding debt.

The change in Japan's energy balance is also proving painful for Japanese companies as it is happening largely without a well-defined energy policy from the government to assure firms that energy supplies and costs will remain stable in the future.

Nippon Keidanren, the country's largest business lobby, cited uncertainty about energy, a strong yen and the manufacturing shift overseas on Tuesday as reasons why pay raises are out of the question for annual labour union negotiations in the spring.

The wild card is energy costs, said Hiroaki Muto, senior economist at Sumitomo Mitsui Asset Management Co.

What we really need is some type of revolution to make ourselves more energy efficient. In that sense, you could say the government's energy policy is contributing to all of this.

The trade deficit could peak out at 5 trillion yen in 2015 due to expensive energy imports, Muto predicted ($1=77 yen)

(Editing by Neil Fullick and Ed Lane)