Japan's exports fall by half in February

[March 25, 2009]  TOKYO (AP) -- Japan's exports fell by nearly half in February from a year earlier -- a record drop -- the government said Wednesday, dragged down by plunging auto shipments to the U.S. and Europe.

Exports tumbled 49.4 percent, the sharpest decline since the Ministry of Finance began compiling comparable data in 1980 but generally in line with economists' expectations.

Demand plunged in all regions of the world, particularly North America, Europe and Russia. The dismal figures highlight the grim outlook for Japan's export-oriented economy, the world's second-largest.

Japan, which had relied foreign sales of its cars and gadgets to drive economic growth, now finds itself mired in its deepest recession since the end of World War II. The International Monetary Fund expects the economy to contract 5.8 percent for the 2009 calendar year, though many economists predict it could be far worse.

The slowdown has also sapped demand for imports, which fell 43 percent in February from a year earlier.

As a result, Japan posted its first trade surplus in five months, breaking a run of four straight months in the red. The surplus was 82.4 billion yen ($841 million), down 91 percent from last year.

Exports to the rest of Asia retreated 46 percent, and exports to EU countries were down 55 percent.

Shipments of automobiles plummeted 64 percent, with those to the U.S. down 71 percent. Overall exports to the United States fell 58 percent.

Japan's car makers have been among the hardest hit by the global downturn, and the latest industry ouput figures released Tuesday reflect impact of the ongoing slump.

Toyota Motor Corp., which is forecasting its first annual net loss since 1950, said its global production plunged by nearly half in February from a year earlier. Honda Motor Corp. reported a 43 percent drop in global output, while Nissan Motor Co. said its worldwide production declined 51 percent.

Exporters have responded aggressively to the slowdown, reducing shifts, suspending factory lines and announcing thousands of job cuts over the past few months. Economists say they've never seen Japanese companies move so quickly to adjust inventories.

Goldman Sachs economist Chiwoong Lee in Tokyo said their moves may be paying off, shedding a glimmer of hope on Wednesday's otherwise dismal data.

Although exports to China fell almost 40 percent, the contraction eased for the first time in seven months, particularly in the electric equipment sector.

"The overall downtrend in exports is unchanged, but in sectors where inventory correction has gained traction, we are starting to see signs that declines are halting," Lee said in a note to clients. "A full recovery is still far away, but further deterioration is a diminishing possibility, and we expect exports to trend flat at low levels."

[Associated Press; By TOMOKO A. HOSAKA]

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