Exports plummeted 35 percent from a year earlier, the sharpest decline since 1980, the earliest year for which there is comparable data, the Finance Ministry said today in Tokyo. The December drop eclipsed a record 26.7 percent decline set the previous month. Economists predicted a 30.3 percent contraction.
Imports fell 21.5 percent from a year earlier, but this was not enough to prevent a trade deficit. Exports to the U.S., China and Europe all fell by the most ever as the global recession spread, today’s report showed. Exports to Asia, which make up about half of Japan’s total shipments, declined 36.4 percent. Exports to China dropped 35.5 percent. Exports to the U.S. dropped 36.9 percent and to Europe were down a massive 41.8 percent.
Consumer Confidence At Quarter Century Low
Japan’s consumers became more pessimistic than they have been in at least 26 years, suggesting that households are likely to keep cutting back on spending as the recession deepens. The confidence index dropped to 26.2 last month from 28.4 in November, the lowest since the government began compiling the figures in 1982.
And employment is getting harder to find as the ratio of jobs available to each applicant dropped for a 10th month in November to 0.76, extending the longest losing streak since 1998.
Meanwhile Hiroshi Yoshikawa, Tokyo University professor and head of the Japanese government business cycle measurement committee said that Japan’s present recession may become the longest in the postwar era. “We’d better get ready for a three-year recession,” he said in an interview with the press this week. The decline “will be very severe, not only in terms of duration but also depth”.
And just to rub salt into the wound Barclays Capital now predict that the Japanese economy may have shrunk as much as 12 percent on an annualized basis last quarter, which make it the steepest decline since 1974.
