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Japan sees record drop in exports Toyota braced for historic loss
(about 6 hours later)
Japan posted a trade deficit of $2.5bn (£1.7bn) in November as exports fell at their fastest-ever rate, the ministry of finance has said. Japan's biggest carmaker Toyota has forecast its first annual loss in 71 years due to plummeting sales and a surge in the value of the yen.
Exports were down 26.7% from a year earlier, the ministry said, as a strong yen and the global economic downturn blunt demand for Japanese goods. The firm said it expected a loss of 150bn yen (£1.1bn) in yearly operating profits - from its core operations.
Japan typically runs a trade surplus due to strong demand for its products. Japan also posted a trade deficit of $2.5bn (£1.7bn) in November as exports fell at a record rate.
Japanese media are speculating that car maker Toyota may be about to announce its first operating loss in 71 years. The rising yen saw export levels down 26.7% from a year earlier, the ministry of finance said.
Toyota said it still expected to make a profit on a net level for the year ended March but has cut its forecast sharply to 50bn yen, down from a previous estimate of 550bn yen. It is the second profits forecast cut by Toyota in les than seven weeks.
The latest forecast is far lower than its profit of 1.7 trillion yen earned the previous year.
Toyota's president Katsuaki Watanabe said that the company now expected to sell 8.96m vehicles around the world this year, down 4% from the previous year. Unlike previous years, he gave no goal for 2009.
Japanese carmakers have all been hurt by plummeting car sales in their key overseas markets, including the US.
The surging yen has eroded their overseas earnings and also hit their profits - the dollar has fallen to 13-year lows against the Japanese currency.
Honda last week cut its annual profit forecast by 67%, and outlined a list of counter-measures such as putting off non-urgent investments to prop up its profitability.
In the United States, President Bush threw the struggling carmakers General Motors and Chrysler a lifeline of up to $17.4bn to stave off bankruptcy as they reel under slumping demand.
Output slashedOutput slashed
Japan typically runs a trade surplus due to strong demand for its products - but the surging yen has hit demand for its goods.
Japanese exports fell sharply to all areas but those to the US were worst-hit, plunging 33.8% - also a record drop.Japanese exports fell sharply to all areas but those to the US were worst-hit, plunging 33.8% - also a record drop.
Shipments to the European Union were down 30.8% while those to China fell 24.5%, the biggest fall since 1995, said Reuters news agency.Shipments to the European Union were down 30.8% while those to China fell 24.5%, the biggest fall since 1995, said Reuters news agency.
Exports to the rest of Asia declined 26.7%.Exports to the rest of Asia declined 26.7%.
Imports were also down - 14.4% overall - due in part to lower oil prices.Imports were also down - 14.4% overall - due in part to lower oil prices.
Car makers such as Honda and Toyota have cut their output and their profit forecasts in an effort to cope with the decline in demand.
Toyota is due to announce its next profit forecast on Monday.
Some Japanese media have been speculating that the firm could be about to announce its first operating loss in 71 years. Other media say it may post a small profit.
Japan's economy - the world's second-largest after the US - has slipped into its first recession in seven years after two quarters of negative growth in a row.Japan's economy - the world's second-largest after the US - has slipped into its first recession in seven years after two quarters of negative growth in a row.
The government has forecast zero growth in the year ending March 2010.The government has forecast zero growth in the year ending March 2010.