Japan logs annual trade deficit as exports dive

Tuesday, April 21, 2009 at 9:43 PM Posted by Beijing News


Japan reported Wednesday its first trade deficit for a fiscal year since 1980 as exports suffered in the global economic downturn, which has pushed Asia's biggest economy deep into recession.

But there were some glimmers of hope that the slump may be easing as data showed that exports rebounded in March from the previous month.

For the 12 months through March, Japan logged a trade deficit of 725.3 billion yen 7.3 billion dollars, its first such shortfall in 28 years, government data showed.

In March alone the trade surplus plunged 99 percent from a year earlier to 10.96 billion yen as exports fell 45.6 percent year-on-year.

But in a sign that overseas demand may finally be stabilising, exports rose 18.6 percent from the previous month and the year-on-year pace of decline slowed from a record drop of 49.4 percent seen in February.

"The rapid worsening seen in past months is coming to a halt now," said Hideyuki Araki, an economist at the Resona Research Institute.

"This development seems to be consistent with data in other countries signalling manufacturing activities are hitting a bottom."

But he said further signs of a recovery would be needed before markets could be confident that exports were over the worst.

Japan's heavy dependence on foreign demand to drive its economy has left it vulnerable to the current slowdown, which has sent sales of cars, televisions and other goods tumbling.

The economy logged its worst performance in almost 35 years in the last quarter of 2008, contracting at an annualised pace of 12.1 percent.

Analysts warn that the first quarter of 2009 could be just as bad, with Japan heading towards its worst recession since World War II.

The downturn has inflicted heavy losses on iconic companies such as Toyota and Sony, prompting a wave of job cuts.





Weel

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