Japan Exports Plummet 45.7%, Deficit Widens to Record

[RedEarth]

Source: Bloomberg

Feb. 25 (Bloomberg) -- Japan’s exports plunged 45.7 percent in January from a year earlier, resulting in a record trade deficit, as recessions in the U.S. and Europe smothered demand for the country’s cars and electronics.

The shortfall widened to 952.6 billion yen ($9.9 billion), the biggest since 1980, the earliest year for which there is comparable data, the Finance Ministry said today in Tokyo. The drop in shipments abroad eclipsed a record 35 percent decline set the previous month.

Exports to the U.S. tumbled an unprecedented 52.9 percent from a year earlier, and shipments to Asia and Europe also posted the largest-ever declines as the global recession deepened. The collapse is likely to force Japanese companies to keep firing workers and closing factories, worsening an economy that shrank the most in 34 years last quarter.

“The pressure on companies to cut jobs and investment is rising and that will make the recession deep and protracted,” said Yasuhide Yajima, a senior economist at NLI Research Institute in Tokyo.



Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aTCZ_f77WEqw&refer=home

[Mayberry Machiavelli]

1. Holy shit....

[Kokonoe]

2. US automakers have the same problem.

I doubt Japanese representatives will be demanding job and pension cuts.

[Alhena]

3. Those are incredible numbers. Depression-style numbers

[tama]

4. So I guess

Japan is not going to be very able to buy US bonds, but desperate seeking capital to avoid you know what. Who then...?

[Prometheus Bound]

5. That's impossible!

At least that was my first impression when I read the headline. It doesn't seem to matter how good and how competitive your product is. If people don't absolutely need it, I guess you're doomed.

Japan headed for deepening crisis, say analysts
Feb. 26, 2009

HONG KONG (MarketWatch) -- Japanese industrial output and consumer prices likely deteriorated in January, adding to the growing perception that the No. 2 global economy this year will undergo the worst recession in more than half a century, data due out Friday are expected to show.

....Analysts are bracing for a bleak set of economic figures following the release of customs data earlier this week that showed shipments got cut nearly in half in January, and as difficult as things are, harder times lie ahead.

....Analysts said the export downturn was accelerating in magnitude as January's data topped the 35% decline in December as the biggest on record. Export volume, considered a leading indicator for industrial output, fell 41.1% in January, worsening from a 29.9% decline in December.

.....Social fallout
The official figures likely underestimate the degree of hardship come as about one-third of the workforce is now comprised of temporary employees and contractors -- workers generally lower paid and unlikely to receive much in the way of compensation benefits.
"The extreme nature of the present global downturn is about to impose potentially intolerable social pressures on the Japanese system," wrote strategist and author Christopher Wood in his weekly missive Greed & Fear from Hong Kong last week. "The seniority system and the lifetime employment system, which allowed for profitless prosperity during the 1990s, are now in the process of disintegration."
http://www.marketwatch.com/news/story/japan-headed-deepening-economic-crisis/story.aspx?guid={5CBF7637-9990-4635-BB8F-1031A2D99AB4}&dist=msr_1

[Lost in CT]

6. There finace minister was plastered a few weeks ago.... in pooblic. nt

[blueclown]

7. Is Japan going to call in our U.S. treasury bonds?

[Psephos]

8. No one can "call in" Treasury bonds. All they can do is not buy new ones.

Which is the real problem with astronomical deficits. They suck up all available capital, and raise the cost of borrowing not only for the government, but for everyone else.