Japan Reports Record Trade Deficit In January

Ministry of Finance said the trade deficit for the month widened to $9.92 billion -- the biggest gap since 1979 -- as exports fell 46 percent.

TOKYO (AP) -- Japan posted a record trade deficit in January, with exports tumbling 46 percent from a year earlier, as the global economic downturn tightened its stranglehold on overseas demand.

The Ministry of Finance said the trade deficit for the month widened to 952.6 billion yen ($9.92 billion) -- the fourth straight month that imports exceeded exports. It was the biggest trade deficit since the government began compiling comparable data in 1979.

Japan, long criticized by trading partners for its big trade surpluses, has become a net importer in recent months because of the global slump. Exports were cut nearly in half, as shipments of cars, machinery, electronics and semiconductors to all major markets plunged.

The latest data mirrors the sharp declines throughout the export-reliant continent and signals that the pain in Asia may only deepen in the months ahead. South Korean exports fell a record 33 percent in January from the previous year, Taiwan's retreated 43 percent, and Singapore's fell 35 percent.

Like its neighbors, Japan is mired in an ever-worsening recession, with manufacturers including Toyota Motor Corp. and Sony Corp. scrambling to slash production and jobs.

Japan's economy, the world's second-largest, shrank at its fastest rate in 35 years in the fourth quarter and at more than triple the pace of the 3.8 percent annualized contraction in the U.S.

"Further downside seems in store for January-March as a whole, based on reports such as suspensions of production in the auto industry," said Goldman Sachs economist Chiwoong Lee in a note to clients. "This implies further manufacturing layoffs and labor market deterioration."

The government is scheduled to release other key data on Friday, including industrial production and unemployment figures, that will likely reflect the broad impact of the export collapse.

Exports to the U.S. fell 53 percent, with car shipments down 81 percent on a value basis. Japan's trade surplus with the U.S. fell 75 percent to 132.8 billion yen.

Previously, exports to emerging economies had propped up Japan's trade surplus even as U.S. and European markets slowed. But shipments to Asia and Eastern Europe have also dropped precipitously.

Exports to Asia were down 47 percent, while those to Russia declined 66 percent.

Japan's trade deficit with China expanded 61 percent to 562.7 billion yen ($5.86 billion), its fifth straight monthly deficit.

Meanwhile, overall imports fell 31.7 percent to 4.4 trillion yen, the ministry said in a preliminary report.

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