Japan export slump hits new low
Japanese trade deficit biggest on record as data shows exports slide by almost half.
Recent months have seen Japan, China, Singapore and other export-dependent Asian economies report steep falls in trade as demand in key markets such as the US and Europe dries up.
South Korean exports fell a record 33 per cent in January from the previous year, Taiwan’s slumped 43 per cent, and Singapore’s fell 35 per cent.
Production cuts
Wednesday’s figures also showed Japanese exports to other Asian countries also declining by 46.7 per cent, the fourth straight month of falls, with shipments to China falling 45.1 per cent.
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| Japan’s export-dependent economy has been hit hard by plunging global demand [EPA] |
Previously exports to emerging economies have helped prop up Japan’s trade surplus even as US and European markets slowed.
Many Japanese companies ship automobile and consumer electronics parts to assembly lines throughout Asia, from which final products are shipped to countries across the globe.
But a collapse in global demand since late last year, has led to a sharp increase in inventories and forced many leading Japanese companies to slash production at a rapid pace.
On Friday the government is scheduled to release other key data, including industrial production and unemployment figures expected to show the impact of the export collapse.
The dismal export figures point to further production cuts and job losses in coming months as companies try to clear inventories of unsold goods.
Japan’s trade balance has been in decline for four straight months, the longest such sequence in nearly 30 years.
Imports also fell by 31.7 per cent in January, marking a third consecutive month of drops from a year earlier.
Last week Japan’s economy minister said the country was facing its worst crisis since World War II after statistics showed the Japanese economy contracting at its fastest rate since the global oil crisis of the mid-1970s.