From The Financial Times:
Japan in record current account deficit
By Michiyo Nakamoto in Tokyo
Published: March 9 2009 02:07 | Last updated: March 9 2009 05:39
Japan suffered its largest current account deficit ever in January, reflecting the impact of plunging global demand on its export-dependent economy and raising concerns that it was now in a depression.
Japan’s current account fell into deficit for the first time since 1996 and at Y172.8bn ($1.75bn, €1.39bn) was much larger than the Y15.3bn shortfall forecast by economists.
The sharp deterioration in the current account balance highlights the impact that falling demand, a higher yen and lower interest payments have had on Japan’s revenues from overseas.
That in turn has led to a rash of job cuts and factory closures that have added to the economic gloom.
Corporate bankruptcies in Japan rose 10.4 per cent year-on-year in February, in the ninth straight month of increases, according to Tokyo Shoko Research.
Japanese policymakers have scrambled to counter the damage wrought by the global financial crisis, but have had limited success so far.
The government last week won passage of a Y5,000bn stimulus package, which it rammed through the Diet following months of wrangling with the opposition.
The Bank of Japan has been buying commercial paper and corporate bonds but growth in bank lending slowed in February, for the second month.
January’s deficit was the biggest since the government started compiling comparable data in 1985.
Copyright The Financial Times Limited 2009