Japan’s Nikkei index plummets to 26-year low as exports slump
Government figures released today show that exports in Japan almost halved in January, while imports fell by a third.
The export-dependent economy, which was once seen as relatively unscathed by the global financial crisis, is being hit by a slump in demand for its products overseas.
Exports fell by a record 46.3% from a year ago to 3.28 trillion yen, the fourth month in a row of year-on-year falls. Exports to the US were hit particularly badly, recording a fall of 52.9%.
Car exports declined 66.1%, with semiconductor and electronic parts exports down 52.8%. This has, in turn, had an impact on car making giant, Toyota, which is believed to be on track to make its first annual loss in seven decades. Job and production cuts have been rife across Japanese companies.
Japan’s current account fell into its largest deficit on record in January of 172.8 billion yen (£1.2 billion) – it was the country’s first deficit since 1996.
In the past, Japan has run a large surplus in its current account as a result of high demand overseas.
The current account measures the balance between a country’s exports and imports – a deficit means more imports.
Following the news, the Nikkei-225 index lost 87.07 points to 7,086.03 the lowest closing level since October 1982.
Japan‘s economy, which is the world’s second largest, is in its first recession since 2001.
Last month, the economy suffered its worst ever decline in 35 years. In the period October to December, Gross Domestic Product (GDP) fell 3.3% – the third consecutive quarter in which GDP declined.
In comparison, the euro zone suffered a 1.5% decline while the US, which is the world’s largest economy, suffered a 1% fall, meaning the slowdown in Japan is much steeper than that of its counterparts.
On an annual basis, Japan’s economy shrank at a rate of 12.7%.
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