JAPANESE EXPORTS have nearly halved from a year ago, official figures showed yesterday, stoking fears that the world’s second largest economy is heading even deeper into recession.
The country’s dismal February trade performance was the latest in a string of bleak figures. It fuelled expectations that Japan was on course to suffer a fall in output in the first three months of 2009 that could match or even exceed the 3.2 per cent quarter-on-quarter decline recorded in the final three months of last year.
Japan achieved a trade surplus of 82.4 billion yen last month, after a record deficit of more than 950 billion yen in January.
However, it did so only because of a record 43 per cent drop in imports to 3,443 billion yen. That fall underscored a diminishing appetite for raw materials and weakening domestic demand.
Exports fell 49.4 per cent year- on-year to 3,525 billion yen, their worst performance since Japan began keeping comparable trade statistics in 1980. “The fall in imports, in part, reflects lower commodity prices and the impact of the stronger yen. But it also reflects collapsing domestic demand,” Daiwa Securities said.
Matt Robinson, an economist at Moody’s Economy.com, said that US and European demand was likely to remain subdued for some time. “This will weigh heavily on GDP growth during the global recovery period, meaning Japan could lag the rest of the world considerably in recovering to its potential growth rate,” he said.
Japanese officials fret that recessions in key markets could lead to protectionist measures that would further hit exporters hampered by the strength of the yen.
Prime minister Taro Aso has ordered officials to draw up a fiscal stimulus package for enactment early in the fiscal year starting next month. Minister for finance Kaoru Yosano said a package worth about 20,000 billion yen was reasonable.
The government has already implemented or approved fiscal stimulus measures equivalent to nearly 2 per cent of annual GDP and officials worry about the effect of greater spending on Japan's already extraordinary debt burden. – ( Financial Timesservice)
