26 Sep 2008

Japan posts trade deficit

9:54 am on 26 September 2008

Japan's trade gap slipped into the red in August as oil imports surged but exports fell.

Excluding January - when exports usually slow in the New Year holidays - it was the country's first trade deficit since November 1982.

Imports outpaced exports by 324 billion yen ($US3.09b) in August.

The news has heightened fears Japan may be on the brink of recession as it follows a sharp contraction in economic growth.

Figures issued earlier this month showed economic output shrank at an annualised rate of 3% between April and June - its sharpest fall in almost seven years - as a result of falling exports and domestic demand.

Rising prices of oil, coal and natural gas drove import costs 17.3% higher to 7.38 trillion yen. Import costs for coal alone jumped 121% and petroleum products by 64%.

By contrast, exports grew just 0.3% to 7.56 trillion yen - mainly as a result of falling automobile shipments.