Japan’s Exports Plummet Record 35%, Signaling More Job Cuts

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Source: Bloomberg

Jan. 22 (Bloomberg) -- Japan’s exports plunged by a record in December, signaling companies will be forced to shut factory lines and fire more workers, driving the economy deeper into recession.

Exports plummeted 35 percent from a year earlier, the sharpest decline since 1980, the earliest year for which there is comparable data, the Finance Ministry said today in Tokyo. The December drop eclipsed a record 26.7 percent decline set the previous month. Economists predicted a 30.3 percent contraction.

The Bank of Japan today forecast the economy will shrink until the year starting April 2010 and said it may start buying corporate bonds to improve funding for businesses. Toyota Motor Corp., Sony Corp. and Honda Motor Co. are shedding thousands of workers and closing factory lines as profits and sales dwindle.

“This recession will be deep and widespread,” said Kyohei Morita, chief Japan economist at Barclays Capital in Tokyo. “Given today’s numbers, households should prepare for more job and wage cuts.”

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