TOKYO, Oct. 22 (Xinhua) -- Japan logged a record trade deficit for the April-September half-year, as sovereign debt troubles in Europe coupled with rising tensions with China over a territorial dispute caused Japanese exports to plunge, the government said Monday.
According to Japan's Finance Ministry, for the first half of fiscal 2012 through September, Japan saw trade deficit surging 90. 1 percent from a year earlier to 3.22 trillion yen (41 billion U.S. dollars), marking the worst deficit since records began in 1979.
In the same period, the ministry noted that trade to Europe slumped by 16 percent, creating Japan's first deficit with the European Union that stood at 92.1 billion yen (1.1. billion U.S. dollars) while the value of exports to China, the world's second- largest economy and Japan's largest trading partner, retreated 8 percent to 59 billion yen.
In September alone, Japan's deficit stood at 558.6 billion yen (7.04 billion U.S. dollars), marking the third successive month of increase and the largest recorded for September, the ministry's preliminary data showed.
Japan's exports of goods to China plummeted 14.1 percent from a year earlier in the recording period to 953.8 billion yen (11.97 billion U.S. dollars), marking the biggest drop since a 20.2 percent slump in January and a 9.9 percent decline in August.
The overall balance of trade with China for the month came to a deficit of 329.5 billion yen (40.6 billion U.S. dollars), the latest figures showed, with imports from China climbing just 3.8 percent to 1.28 trillion yen (16.4 billion U.S. dollars).
Most notably, automobile exports to China sank 44.5 percent from a year earlier in September, as sentiment towards Japanese- made products was damaged by Japan's attempt to nationalize the hotly disputed Daioyu islands on Sept. 11, with nationwide protests in China sparking widespread boycotts of Japanese products and services.
According to sources with knowledge of the matter, Japan's top three automakers have all suffered over the dispute, with sales at Honda Motor Co., Nissan Motor Co. and Toyota Motor Corp. all tumbling by more than 30 percent, causing the automakers to slash their production levels.
One economist at BNP Paribas in Tokyo noted that the deteriorating relationships with China could prove to be a major blow to the Japanese economy henceforth and suggested that if relations continue to be strained going into next year then the likelihood would be that Japan would be unable to avoid another economic recession.
Other economists warned that the full affects of Japan's slumping trade with China would most likely not be felt until next month, in addition they said that worsening ties between the two countries would impact Japan more than China as China buys 20 percent of Japan's total exports, whereas Japan purchases less than 10 percent of China's.
Overall, Japan's exports in September totaled 5.4 trillion yen (68.7 billion U.S. dollars), with imports rising 4 percent from a year earlier to 5.9 trillion yen (75.9 trillion U.S. dollars), on increased need for expensive oil and other fuel imports needed for power generation, as the majority of Japan's nuclear reactors remain offline in the wake of the Fukushima nuclear crisis.
While exports to Europe, including notable drops in automobiles and electronic parts, were pressured by the eurozone's ongoing sovereign debt crisis, exports to Asia as a whole also retreated 4. 7 percent to 17.74 trillion yen (230 billion U.S. dollars), in the first half of 2012, the ministry said.