Japan has recorded an unprecedented trade deficit and sees its economy to shrink up to 3% by end of 2009 as recession continues to hurt Asian countries.
Top automakers Toyota, Honda and Nissan were already forced to cuts thousands of jobs. They are now sharply reducing production as part of they cost cutting initiatives to counter the slump in global car sales.
Recession in Japan shows no signs letting up as the Finance Ministry announced that the trade deficit for January this year swelled up to JPY 952.6B, which is the lowest it has been ever since its earliest record 30 years ago.
Exports dived 45.7% from last year, highlighting that even Asia's largest economy was left exposed during the global economic slowdown. This was largely due to its major reliance to export of cars, high tech equipment and other commodities to foreign buyers. This is a clear indication that Japan's dependence on exports is not working at all, at least not during times of global recession where international demand is hampered due to shrinking economies all around the world.
Top automakers Toyota, Honda and Nissan were already forced to cuts thousands of jobs. They are now sharply reducing production as part of they cost cutting initiatives to counter the slump in global car sales.
Toyota Motor, the leading car manufacturer in the world, announced a decline in global output by 42.6% this January from year ago. Nissan Motor and Honda each reported decreased output by 54% and 33.5% respectively.
Japan's economy, second only to the United States, is currently in it's worst recession in decades, with GDP growth contracting 12.7% in Q4 2008, the lowest it has been in 35 years.
Back in the 90's, Japan was able to recover due to the strength of its exports, but this time, declining global consumer spending and the Yen's relative strength has Japanese exporters wanting and struggling the compete internationally.
