Shipments abroad dropped 40.9 percent from a year earlier, more than April’s 39.1 percent decline, the Finance Ministry said today in Tokyo. From a month earlier, exports fell 0.3 percent, the first deterioration since February.
Imports slid 42.4 percent from a year earlier, and the trade surplus narrowed 12.1 percent to 299.8 billion yen ($3.1 billion), the ministry said.
Bank of Japan Governor Masaaki Shirakawa said this month that, although the recession probably bottomed last quarter, he is cautious” about the prospects for a sustained recovery.
Analysts surveyed by Bloomberg predict growth will resume in the current quarter after the economy shrank a record annualized 14.2 percent in the previous period. Growth will peak at 2 percent in the third quarter and grind to a halt in 2010, analysts said.
The World Bank this week downgraded its forecast for global growth, saying the world economy will shrink 2.9 percent this year, worse than the 1.7 contraction predicted in March. Fewer capital inflows and less direct investment will mean increasingly grave prospects” for developing nations, the lender said.
Toyota Motor Corp. said yesterday the outlook for car sales in the U.S. remains uncertain. The U.S. economy, Japan’s biggest export market, is forecast to shrink at an annualized 2 percent rate in the current quarter and grow only 0.5 percent in the next three months.
Nor has China’s recovery been enough to revive earnings for Japan’s exporters. Hitachi Construction said this month that sales in China haven’t improved as much as the company had anticipated. The world market for digging equipment will contract by more than a third in the first half of the business year and rebound by only 6 percent in the second half, according to company President Michijiro Kikawa.