Japanese exports suffer another record plunge

TOKYO (AFP) – Japan announced Wednesday another record fall in exports as the global economic downturn crushes demand for its cars and high-tech goods and pushes the country deeper into recession.

The sharp decline reinforced fears that the world's second-largest economy will suffer another sharp contraction this quarter, following its worst performance in more than three decades in the fourth quarter of 2008.

Japanese exports plunged 49.4 percent in February from a year earlier, surpassing January's slump of 45.7 percent, the finance ministry reported.

Shipments to the United States and Europe more than halved while even demand from the once-booming Chinese economy dropped almost 40 percent.

Japan's heavy dependence on foreign demand to drive its recovery from a decade-long slump has left it vulnerable to the current global economic slowdown, which has sent sales of cars, televisions and other goods tumbling.

The trade surplus plunged 91.2 percent in February from a year earlier to 82.35 billion yen (840 million dollars), although that was better than a record deficit logged in January, the ministry said.

Japan's economy logged its worst performance in almost 35 years in the last quarter of 2008, contracting at an annualised pace of 12.1 percent.

Analysts warn that this quarter could be just as bad as Asia's biggest economy heads towards its worst recession since World War II.

The corporate sector was a key driver of Japan's economic recovery following the 1990s recessions, as companies enjoyed strong profits and invested heavily to expand their production facilities.

But the global downturn has caused demand for Japanese goods to dry up, prompting firms such as Toyota and Sony to shed thousands of jobs.