Can you imagine it? Japan now has a trade deficit. Reuters reports:
Japan's trade balance swung into its biggest effective deficit in more than 25 years in August as exports to the United States fell by the biggest amount on record, underscoring economists' views that Japan is in recession.
Excluding January, when Japanese exports tend to drop on slower factory activity in the New Year holidays, it was the first deficit since 1982, when Japan was reeling in the aftermath of an oil crisis...
Exports edged up 0.3 percent in August from a year earlier, short of a median forecast for a 2.4 percent rise, Ministry of Finance data showed on Thursday.
Imports grew 17.3 percent versus an expected rise of 21.1 percent, as the import value of crude oil hit a record high, bringing Japan's trade balance to a deficit of 324 billion yen ($3.06 billion), against a deficit of 400 billion yen expected...
Japan's exports to the United States fell a record 21.8 percent in August, marking the 12th straight month of annual declines, on sluggish shipments of automobiles.
The weakness in exports to the US looks set to continue to be a drag on the Japanese economy.
Bank of Japan board member Tadao Noda said the U.S. economy could face a deeper adjustment after several major U.S. financial institutions collapsed or came close to it in recent weeks...
While repeating the bank's line that the economy will eventually return to growth, Noda said he expected world economic growth to recover only in 2010 after slowing in 2008 and 2009.
But we don't even have to wait for the impact of the latest financial failures. Data out of the US yesterday provided evidence that the economy is already faltering. Bloomberg reports:
Sales of new homes in the U.S. fell in August to a 17-year low and orders for durable goods dropped more than forecast, evidence of the mounting risks to the economy that Federal Reserve Chairman Ben S. Bernanke warned of yesterday.
Home sales decreased 11.5 percent, more than forecast, to the lowest annual rate since the 1991 recession and the median price sank to a four-year low, figures from the Commerce Department showed today in Washington. Bookings for goods meant to last several years declined 4.5 percent and orders excluding transportation equipment were down 3 percent.