The collapse in global demand has left manufacturers with piles of unsold goods, forcing many leading Japanese companies to slash production at an unprecedented pace. Japan's economy shrank last quarter at its fastest pace since the first oil crisis of the 1970s and economists said the latest figures added to concerns that the recession was worsening. Sales to Brazil fell 38 per cent, more than six times the drop seen in December data. The decline in Japanese exports to other emerging markets is also accelerating. Japanese exports to the rest of Asia sank 46.7 per cent from a year earlier, the fourth straight month of decline, with shipments to China falling 45.1 per cent, data showed yesterday. January figures were affected by Lunar New Year holidays that closed some key Asian export markets for several days. Japan is among the worst affected with the 45.7 per cent plunge in exports in January from a year earlier, a much deeper fall than seen so far in South Korea and China. 'In Asia, the world's manufacturing plant, the slump in the global economy will continue to weigh on production activities and likely to lead to a further decline in exports of semiconductors,' Kyohei Morita, chief economist at Barclays Capital, said in a report. President Barack Obama said a day of reckoning had come and, though he was positive about the longer-term economic outlook, said there were no quick fixes.Īsian countries rely heavily on manufactured exports and have been hit hard as the global financial crisis prompts Western consumers to curtail spending. Federal Reserve Chairman Ben Bernanke warned on Monday of a prolonged recession in the United States, one of Japan's major markets. Many factories in China and elsewhere in Asia use Japanese components to make goods that are ultimately sold in the West. 'Exports to Asia, particularly to China, are tumbling at about the same pace as shipments to the United States, signalling that even China's economy may be shrinking,' Minami said. The economy will gradually worsen further,' said Takeshi Minami, chief economist at Norinchukin Research Institute. 'We don't see any signs of a pick-up in the Japanese economy in the near term. Japan's exports nearly halved in January from a year earlier A cargo truck driver takes a rest at a port in Tokyo today.
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