Japan registers record fall in exports

Japan announces a record drop in exports as the continuing economic slump drags down global demand for vehicles and high-tech products.

Japanese exports almost halved in February when compared to the same month last year, making it likely that the world's second-largest economy will shrink in the current quarter. 

Exports plummeted 49.4 percent, leaving behind January's slump of 45.7 percent, the Japanese finance ministry reported. 

Shipments to the US and Europe fell by more than 50 percent. Exports to China also plunged by almost 40 percent. 

The government said that Japan's trade surplus fell 91.2 percent in February from a year earlier, to 82.35 billion yen (840 million dollars), although that figure was more encouraging than January's record deficit. 

The Japanese economy experienced its worst 35-year slump during the last quarter of 2008, shrinking at an annual pace of 12.1 percent. 

The Asian financial power is one of the countries worst hit by the crisis because of its heavy dependence on foreign economies. 

Analysts believe that Japan's economy will pick up after the United States and China recover from the downturn, initiating a rise in worldwide demand. 

But for now, speculations are that on Friday, the government will report the first year-on-year decline in core consumer prices since September 2007. 

Japan's Central Bank Governor Masaaki says, however, that the country is not yet slipping into another depression. 

"Prices will likely soon start falling. But right now, the country is not going through a vicious cycle where economic contraction and price falls reinforce each other," Shirakawa said in parliament. 

Strong profits and investments by the corporate sector were what pulled Japan's economy out of the 1990s recession, so the country is now feeling the crunch as giant companies like Toyota and Sony cut thousands of jobs.