Japanese exports grew 0.3 percent from a year earlier after rising 8 percent the previous month, the Finance Ministry said today in Tokyo.
A drop in demand for Japan's exports, the main driver of growth for the past six years, is weakening a nation already suffering from weak consumer spending at home. Finance Minister Shoichi Nakagawa, appointed by Prime Minister Taro Aso yesterday, said today the government will consider cutting taxes and increasing spending to buoy the flagging economy.
Japan had a trade deficit of 324 billion yen ($3 billion), the first since January, because of record oil imports. The nation's import bill rose 17 percent from a year earlier.
Shipments to the U.S. plunged 21.8 percent last month, the biggest decline on record, and exports to Europe fell 3.5 percent, today's report said. Weak overseas demand caused the economy to shrink an annualized 3 percent last quarter.
Since August, some of Japan's biggest manufacturers have lowered sales targets and announced cost-cutting measures that could start to take a toll on smaller companies that supply them.
Toyota Motor Corp. last month reported its biggest earnings decline in five years, citing a slump in U.S. sales. The automaker has fired workers, cut production of some of its U.S.- bound vehicles and scrapped a 2009 sales goal. Grim prospects for exporters have sent shares of Nissan Motor Co. down 38 percent this year, while Sony Corp. shares have shed 46 percent.
The Bank of Japan last week used the word ``sluggish'' to describe the economy, saying that poor export sales and high material costs have cut into margins.
Sales in Europe, Asia and emerging markets supported export growth in the 11 months through July as shipments to the U.S. declined. Now those markets are also deteriorating.