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September 25, 2009

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Home » Business » Economy

Japan hit with slump in exports

JAPAN'S exports tumbled 36 percent in August - with car shipments falling by half - and imports also contracted sharply, the government said yesterday, showing the world's No. 2 economy remains mired in a deep slump.

Declines in automobile and steel exports were especially pronounced, the Ministry of Finance said. Exports fell for the 11th straight month to 4.5 trillion yen (US$49 billion).

"We are not seeing an improvement in exports due to a continued slump in global demand," said Hiroshi Watanabe, an economist at Daiwa Institute of Research. "Japan's exports were particularly hit hard by stagnant demand in Asia and China."

Imports, meanwhile, dropped 41.3 percent from a year earlier to 4.3 trillion yen, reflecting weak consumption within Japan, where the jobless rate is at a record high as companies shed workers. Consumer finance company Aiful Corp said yesterday it will cut 2,000 jobs, or about 44 percent of its work force.

The incoming government of Prime Minister Yukio Hatoyama is seeking to boost consumption and help households with a range of consumer-oriented proposals, including cutting tolls on highways and giving families with children US$275 a month through junior high.

Japan's economy managed to climb out of a yearlong recession in the April-June quarter, growing at an annual pace of 2.3 percent. But with the jobless rate at a record 5.7 percent, growth prospects look murky.

The trade figures showed that the monthly trade surplus, or the amount exports exceeded imports, came to 190 billion yen.

Exports to Asia tumbled 30.6 percent to 2.6 trillion yen. Japan's exports to China were down 27.6 percent.


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