First Trade Deficit in Japan in 30 Years

123jump.com Staff
22 Apr, 2009
New York City

Japan registered its first annual trade deficit in thirty years. Exports and imports declined in March but at a slower pace than in February. Weak exports from Japan to China and U.S. continue to affect global trade. Japan may bailout Elpida Memory and Pioneer using public funds.

[R]5:00AM New York, 7:00PM Tokyo – With the latest decline in exports and imports in March, though at a slower pace than in February, Japan registered its first trade deficit in three decades. Weak exports to China and the U.S. continue to affect the nation’s global trade. Japan may bailout Elpida Memory and Pioneer using public funds in exchange of preferred stocks.[/R]

Japan stocks increased 0.2% despite a report by the finance ministry indicating exports fell 45.6% in March on news the government is considering injecting public funds into Pioneer Corp and Elpida Memory.

In Tokyo trading Nikkei 225 index increased 0.2% or 15.97 to 8,727.30, and the broader Topix Index edged up 0.1% or 0.76 to 829.96.

In the first section of the Tokyo Stock Exchange 25.9 billion shares worth 1.5 trillion yen were traded and in the second section 313 million shares valued at 3.1 billion yen changed hands.

Of the Nikkei 225 index stocks, 97 gained, 114 dropped, and 14 were unchanged. OKI Electrical Industries led gainers in the index shares with a rise of 24.4% followed Pioneer increasing 17.1% as government considering injecting public funds into the company to boost its balance sheet.

Japan Exports Fall 45.6% in March

Japan’s Ministry of Finance reported today that the country’s exports declined 45.6% to 4.18 trillion yen from a year ago, dropping for the sixth month in a row as global trade shrinks led by financial frauds and reckless lending in the U.S.

Imports declined 36.7% to 4.17 trillion yen, yielding a trade surplus of 11 billion yen.

The shipments to the U.S. and China, the two largest trading partners, declined but at a slower pace than in February. Exports to U.S. declined at 51.4% after falling at 58.4% in February and to China dropped at 31.5% after declining at 39.7% in February.

Japan registered its first trade deficit in 28 years of 725 billion yen in the year ended March 31. Trade surplus between the years 2004 and 2007 have been between 7 trillion yen and 11 trillion yen

The finance ministry says shipments to China declined 31.5% in March from a year ago after plunging 39.7% the previous months, while exports to the U.S. dropped 51.4%.

Elpida Memory to Get Government

Nikkei News reported today that the government may bail out Elpida Memory through 50 billion yen investment of public funds in exchange of preferred stock.

The computer memory chipmaker is also planning to raise prices by 50% in May as the buildup in inventory has eased following production cuts.

Elpida Memory’s president Yukio Sakamoto said that the company intends to become profitable in the second half of the fiscal year starting April 1.

Yen Rises 0.3%

The yen increased 0.3% to 98.26 against the dollar from 98.30.

Gainers & Losers

OKI Electrical Industries led gainers in the Nikkei 225 index shares with a gain of 24.4% followed by gains in Pioneer Corp. of 17.1%, in Fuji Electric Industries of 10.1%, in Toshiba Corp. of 9.6%, and Nisshinbo Holdings of 8.6%.

Pioneer Corp. increased on news the government is considering bailing out the company using public funds.

Hino Motors led decliners in Nikkei 225 index shares with a fall of 4.8% followed by losses in Mitsui Chemicals of 4.8%, in Mazda Motor Corp. of 4.7%, in Toho Zinc of 4.6%, and Credit Saison of 4.3%.