Japanese exports have almost halved from a year ago, a record plunge that puts the world's number two economy on course for its worst recession since World War II.
Japan's dependence on foreign markets means that its economy has been one of the worst affected by the global downturn, which has pummelled demand for cars and high-tech gadgets.
Japanese exports plunged 49.4% last month from a year earlier, surpassing January's slump of 45.7%, the finance ministry reported. Shipments to the US and Europe more than halved while demand from the once-booming Chinese economy dropped almost 40%.
The Japanese economy logged its worst performance in almost 35 years in the last quarter of 2008, shrinking at an annualised pace of 12.1%.
Its economy is also bracing for another bout of deflation. The government may report on Friday the first year-on-year decline in core consumer prices since September 2007, analysts said.
But Japan is not yet slipping into another deflationary spiral, central bank governor Masaaki Shirakawa said in parliament.
The economy is facing a further downturn 'and prices will likely soon start falling. But right now, the country is not going through a vicious cycle where economic contraction and price falls reinforce each other,' he said.
The corporate sector was a key driver of Japan's economic recovery following the 1990s recession, as companies enjoyed strong profits and invested heavily to expand their production facilities. Now corporate giants such as Toyota and Sony are slashing thousands of jobs as they fall deep into the red.
Analysts have warned that the Japanese economy will not be able to recovery until demand picks up in the US and China.
