TOKYO (AFP) — Japan said Thursday its exports fell for the first time in more than four years in June as the US financial crisis and soaring oil prices sapped the strength of Asia's largest economy.
Japan's trade surplus meanwhile plunged 88.9 percent from a year earlier, dropping for a fourth straight month as car exports to the US and Europe tumbled amid a weaker economy and high fuel costs, official figures showed.
Japan posted a trade surplus of 138.63 billion yen (1.28 billion dollars) for June, far below analyst forecasts for a figure of about 450 billion yen.
Exports slipped 1.7 percent to 7.16 trillion yen, declining for the first time since November 2003. Imports rose 16.2 percent to a record high of 7.02 trillion yen, inflated by record high oil prices.
Exports, particularly of cars, fell due to slowing economic growth in the United States and Europe that was "very negative" for Japan, said Keiji Kanda, senior economist at Daiwa Institute of Research.
Japan's trade surplus with the United States shrank 40.2 percent, with exports dropping 15.4 percent as the world's largest economy struggled due to the fallout from the subprime mortgage crisis.
Japan saw a 14.2 percent drop in car exports to the US in June and a 15.4 percent tumble to the European Union area.
"A massive decline in auto exports to the EU seems to reflect weakening demand amid an economic slowdown in the region," said Morgan Stanley economist Takehiro Sato.
Japan's economy showed resilience in the first quarter of 2008, expanding at a brisk 4.0 percent annualised pace despite weak US growth and high oil prices.
But analysts are concerned that Japan's economic recovery from a decade-long slump may now be stalling due to the worsening global economic climate.
"Export volumes are likely to struggle for the remainder of the year, but it looks like we are nearing the low point for the trade surplus," predicted Macquarie Securities economist Richard Jerram.
The main causes of cooling exports are weaker demand from Europe and slower growth in the developing world as inflation and monetary policy tightening hurts demand, he said.
Japan's trade surplus fell 28.8 percent with the European Union area and 6.3 percent with the rest of Asia.
The deficit with China narrowed 65.5 percent as export growth slowed to 5.1 percent.
"This could be due to China's economy feeling the effects of the US slowdown or the Chinese government putting restrictions on shipments ahead of the summer Olympics" in Beijing, said Daiwa's Kanda.
In addition to the drop in exports, Japan's economy was squeezed by the rising cost of oil imports, which rose 54.7 percent year-on-year in June.
Imports of liquefied natural gas climbed 56.5 percent by value and coal imports soared 149.5 percent.
Japan has virtually no natural energy resources and is heavily dependent on oil and gas imports from the Middle East.
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