TOKYO -- Japan's annual exports in January fell the most since the global financial crisis as demand weakened in China and other major markets, leaving the economy in a precarious position after a fourth-quarter contraction.
Ministry of Finance data showed exports fell 12.9% year-on-year in January versus a median market estimate for a 11.3% drop, with the fourth straight month of declines led by a slump in shipments of steel and oil products. It was the biggest decline since October 2009 when the global financial crisis knocked demand across the world.
The latest data adds to growing concerns that Japanese authorities are left with few options to revive a stumbling economy even as the Bank of Japan remains proactive in policymaking, shocking markets last month by adopting negative interest rates to spark momentum.
"Exports were dragged down by steel and oil products due to the market situation. Moreover, exporters held off from shipments ahead of Chinese New Year holidays which took place earlier than last year," said a ministry official.
The slowdown in China, Japan's biggest trading partner, remains a big drag on the domestic economy as well as globally, hurting exporters of commodities and a wide swathe of consumer products. In January, Japanese exports to China fell 17.5% from a year earlier, down for a sixth straight month due to declines in shipments of liquid-crystal device and organic compounds.
The world's third-largest economy contracted an annualised 1.4% in October-December.
While analysts expect a return to moderate growth in the current quarter, sluggish exports and weak consumer spending underscore the difficulty policy makers have in putting the economy back on track.
Japan is not alone in suffering a rough start for its exporters, with the chill in China rippling across trade-reliant regional economies such as South Korea, Taiwan and Singapore.
Shipments to Asia, which account for more than half of Japan's overall exports, fell 17.8% in January, marking a fifth consecutive month of annual declines.
US-bound exports declined 5.3% in the year to January, led by shipments of steel and car parts, while shipments to EU fell 3.6%. Imports fell 18.0% in the year to January, versus the median estimate for a 16.0% annual decrease, swinging the trade balance into a deficit of 645.9 billion yen (US$5.66 billion).