Japan registered a trade deficit of 725.3 billion yen ($7.3 billion) for the financial year ended 31 March 2009 (April 2008-March 2009) - the first yearly trade deficit since 1980 - as exports plummeted with the global economic downturn.
Exports from Japan fell 45.6 per cent in March 2009 alone, after Asia's biggest economy fell into a deep recession. Total exports fell by 16.4 per cent, whilst imports dipped 4.1 per cent, the finance ministry said.
Exports to the US and Europe – its two main markets - dropped significantly, Exports to Asia also declined.
Exports in March, however, rebounded from the previous month. Japan's exports rose 18.6 per cent in March from February even as exports fell 49.4 per cent year-on-year in February.
Japan, which is heavily dependent on export demand to drive its economy, saw its trade surplus fall 99 per cent to 10.96 billion yen in March on an year-on-year basis.
The Japanese economy contracted by as much as 12.1 per cent - its worst performance in nearly 35 years - in October-December 2008 amidst the slowdown, which sent sales of cars, televisions and other goods tumbling.
Analysts expect the Japanese economy to slip further into recession in the wake of heavy losses and subsequent job cuts reported by major companies such as Toyota and Sony.
The Bank of Japan has called for government stimulus to boost consumption to avert a 3 to 5 per cent contraction of the economy. BoJ has lowered its projections amidst plunging demand and rising unemployment.