Tech & Biz

Japan sees record drop in exports

by Sanjay Jha | December 21, 2008 at 08:21 pm

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The prevailing economic recession has engulfed Japan, the world's second-largest economy severely and country has slipped into its first recession in seven years by shrinking in the third quarter. The deepening global financial crisis has hit Japan's biggest export markets.

In a just government data, Japanese exports logged their biggest annual decline in seven years in October, pushing the trade balance into deficit and reinforcing worries the global financial crisis may push the economy deeper into recession.

Japan posted a trade deficit of 223.4 billion yen in November, with the nation’s global and U.S.-bound exports both posting the steepest declines on record from a year earlier amid the world economic slowdown, the Finance Ministry said Monday.

Exports were down 26.7% from a year earlier, the ministry said, as a strong yen and the global economic downturn blunt demand for Japanese goods.

Japan typically runs a trade surplus due to strong demand for its products.

Japanese media are speculating that car maker Toyota may be about to announce its first operating loss in 71 years.

Output slashed

Japanese exports fell sharply to all areas but those to the US were worst-hit, plunging 33.8% - also a record drop.

Shipments to the European Union were down 30.8% while those to China fell 24.5%, the biggest fall since 1995, said Reuters news agency.

Exports to the rest of Asia declined 26.7%.

Imports were also down - 14.4% overall - due in part to lower oil prices.

Car makers such as Honda and Toyota have cut their output and their profit forecasts in an effort to cope with the decline in demand.

Toyota is due to announce its next profit forecast on Monday.

Some Japanese media have been speculating that the firm could be about to announce its first operating loss in 71 years. Other media say it may post a small profit.

Japan's economy - the world's second-largest after the US - has slipped into its first recession in seven years after two quarters of negative growth in a row.

The government has forecast zero growth in the year ending March 2010.