Japan’s exports plummeted by 50% year-on-year, according to February trade figures from the Ministry of Finance.
Between February 2008 and 2009, exports fell 49.4% from ¥7 trillion (£49 billion) to ¥3.5 trillion. Imports fell 43% over the same period, from ¥6 trillion to ¥3.4 trillion. In January, exports experienced a similar fall of 45.7% against the previous year.
Michael Taylor, a senior economist at Lombard Street Research, says the data shows there is no sign of a let-up in the export implosion which began late last year.
In a report on Japan published today, Taylor says: “In the first two months of the year exports are over 23% lower than the Q4 average. With little prospect of an imminent domestic revival, plummeting exports spell continued severe recession for Japan.”
Imports are starting to catch up with exports in their scale of decline, reflecting the weakness of domestic demand, he adds.
Although the Bank of Japan will implement fiscal easing measures in the coming financial year, sustainable recovery in the country may not happen until export demand revives.
“A fall in the yen would also be a positive and seems likely given Japan’s weak economic fundamentals – over the last 12 months Japan’s real effective exchange rate has risen by almost 30%, exacerbating an already extremely tough environment for Japanese exporters,” Taylor says.