— Japan Jan Trade Deficit Y1.475 Trln; MNI Fcast -Y1.44 Trln
— Japan Jan Trade Balance Hits Record Deficit
— Japan Jan Exports -9.3% Y/Y Vs MNI Median Forecast -9.5%
— Japan Jan Exports Post 4th Y/Y Drop In Row
— Japan Jan Imports +9.8% Y/Y Vs MNI Median Forecast +9.2%
— Japan Jan Imports Post 25th Y/Y Rise In Row
— Japan Jan Exports to Asia -13.7% Y/Y, 4th Drop In Row
— Japan Jan Exports To China -20.1% Y/Y, 4th Drop In Row
— Japan Jan Exports To US +0.6% Y/Y, 3rd Rise In Row
— Japan Jan Exports To EU -7.7% Y/Y, 4th Drop In Row

TOKYO (MNI) – Japan posted a record high trade deficit in January
as the export slump caused by the global slowdown and the relatively
strong yen was aggravated by the Lunar New Year holidays, data from the
Ministry of Finance showed Monday.

Japan’s trade balance hit a record deficit of Y1.475 trillion last
month, surpassing the previous record of Y967.9 billion marked in
January 2009.

The headline figure came in worse than the median forecast by
economists in a Market News International survey for a deficit of Y1.44
trillion.

Japan posted a trade deficit of Y2.49 trillion in 2011, the first
shortfall since 1980, when the aftermath of the second oil crisis pushed
up import costs sharply, resulting in a trade deficit worth Y2.6
trillion.

The yen maintained its safe-haven status in January amid concerns
about the sovereign debt crisis in Europe. It was 6.7% stronger than a
year earlier, with dollar/yen averaging Y77.33 last month vs. Y82.91 in
January 2011, the MOF said.

In January, exports fell 9.3% on the year to Y4.51 trillion,
marking a fourth straight month of declines after -8.0% in December. It
was largely in line with the median forecast by economists in a MNI
survey for a 9.5% drop.

Exports of semiconductors and other electronic parts, which are
sensitive to changes in the trend of the global economy, fell 15.8% on
year while shipments of optical equipment dropped 7.0%.

Exports of iron and steel products also continued to slump.

By contrast, Japanese imports rose 9.8% y/y in January to Y5.96
trillion for the 25th consecutive rise on continued high demand for
crude oil and liquefied natural gas used for power generation. It was
slightly above than the median forecast by economists in a MNI survey
for a 9.2% rise.

In January, imported crude oil prices averaged $113.3 a barrel, up
23.5% on year. But the pace of growth decelerated from rises of 32.4% in
December, 33.0% in November and 43.5% in October amid softer commodity
prices.

Exports to Asia, the largest market for Japanese goods, fell 13.7%
to Y2.36 trillion last month, a fourth straight drop. It was the largest
year-on-year drop since -15.0% in October 2009.

Exports to China declined 20.1% to Y741.3 billion in January, also
the fourth consecutive y/y drop. It was the sharpest fall since -27.6%
in August 2009.

Japan’s trade deficit with China hit a record high of Y587.9
billion as exports of iron and steel slumped while imports of
telecommunications equipment surged.

Alarmed by a slowing growth, China’s central bank said Saturday it
will cut banks’ reserve requirement ratio by 0.5 percentage points,
effective Feb. 24. The PBOC previously cut the reserve ratio on Nov. 30,
2011, marking a shift in its emphasis toward supporting growth and away
from combating inflation.

Exports to the U.S. rose 0.6% to Y757.5 billion in January for a
third straight y/y rise on higher shipments of automobiles and
construction machinery but the pace of increase slowed from +3.9% in
December.

Meantime, exports to the European Union fell 7.7% to Y531.3 billion
in January for a fourth straight year-on-year fall.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4835 **

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