May 21, 2020 / 4:32 AM / 3 months ago

UPDATE 3-Japan exports fall most since 2009 as pandemic wipes out global demand

    * April exports fall most since Oct 2009
    * Imports fall slightly less than expected
    * Japan sliding deeper into recession as virus bites

 (Updates with carmakers' figures)
    By Tetsushi Kajimoto
    TOKYO, May 21 (Reuters) - Japan's exports fell the most
since the 2009 global financial crisis in April as the
coronavirus pandemic slammed world demand for cars, industrial
materials and other goods, likely pushing the world's
third-largest economy deeper into recession.
    The ugly trade numbers come as policymakers seek to balance
virus containment measures against the need to revive battered
parts of the economy, with the risk of a second wave of
infections only complicating this challenge.
    The central bank will hold an emergency meeting on Friday to
work out a scheme that would encourage financial institutions to
lend to smaller, struggling firms. Policymakers are also
considering cash injections for companies of all sizes.
             
    Ministry of Finance (MOF) data on Thursday showed Japan's
exports fell 21.9% in April year-on-year as U.S.-bound shipments
slumped 37.8%, the fastest decline since 2009, with car exports
there plunging 65.8%.
    Global automakers are struggling to cope with the health
crisis, which has pummelled car sales due to lockdowns in many
countries. Toyota Motor Corp          expects an 80% drop in
full-year operating profit while Mitsubishi Motors Corp         
has reported an 89% drop in annual
profit.                        
    The fall in overall shipments was the biggest since October
2009 during the global financial crisis, but slightly less than
a 22.7% decrease seen by economists in a Reuters poll. Exports
fell 11.7% in March.
    "It's still far from a fully fledged resumption of economic
activity," said Takeshi Minami, chief economist at Norinchukin
Research Institute. "As exports and imports remain stagnant for
a prolonged period of time, global trade will remain
contractionary for the time being."
    Exports to China, Japan's largest trading partner, fell 4.1%
in the year to April, due to slumping demand for chemical
materials, car parts and medicines.
    Shipments to Asia, which account for more than half of
Japanese exports, declined 11.4%, and exports to the European
Union fell 28.0%.
    Other trade-reliant economies in Asia have also been hit
with data on Thursday showing South Korea's exports slumping by
a fifth in the first 20 days of May, year-on-year.            
    Industry data released last week showed Japan's machine tool
orders in April fell to their lowest level in more than a
decade, a sign of deteriorating business spending.            
   Japan's economy slipped into recession for the first time in
4-1/2 years, putting the nation on course for its deepest
postwar slump as the pandemic ravages businesses and consumers.
            
    Monday's first-quarter GDP data underlined the broadening
impact of the outbreak, with first quarter exports plunging the
most since the devastating March 2011 earthquake and tsunami.
    A private sector manufacturing survey showed on Thursday the
decline in Japan's factory activity accelerated in May as output
and orders slumped.             
    Analysts warn of an even bleaker picture for the current
quarter as consumption crumbled after the government in April
requested citizens to stay home and businesses to close.

 (Reporting by Tetsushi Kajimoto; Editing by Sam Holmes)
  
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