Japan slump worries rise

A steep drop in Japan's trade surplus last month, combined with rising oil prices, raised concerns this week that the economic slump that began last year could continue into this one.

Japan's trade surplus plummeted 60 percent from January a year ago to ?200.76 billion, or US$1.92 billion, far worse than the relatively flat figure expected by economists.

Export slowed unexpectedly, rising just 3.2 percent from a year earlier, the slowest pace in more than a year, amid declines in shipments of video recorders, televisions and automobiles. Imports, meanwhile, jumped 11.6 percent, driven by higher prices for oil and steel.

Japan's to China, including Hong Kong, rose 12 percent, to ?829 billion yen last month, after 9 percent growth in December. Japan posted a ?1.46 trillion surplus with China for last year, but last month, Japan had a deficit with China of ?122 billion, a 91 percent increase over January last year.

Japan's with the US shrank 4.4 percent to ?470 billion yen, while its surplus with the European Union plunged 34 percent to ?145 billion, its first drop in more than a year.

The disappointing trade figures added to worries on the state of Japan's economy, coming after a report earlier this month that showed the country slipped into a mild recession last year as exports stalled and consumer spending weakened.

The yen sank against the US dollar after the release of the trade report and the benchmark Nikkei 225 stock index fell 0.8 percent, to 11,500.18 on Wednesday.