Japan logs record trade gap in 2012 as exports struggle
Japan logged a record annual trade deficit in 2012 as exports continued to slide in December in a worrying signal that the effects of a weaker yen and the new government's moves to boost the economy with fiscal and monetary stimulus have been slow in coming.
Sentiment among Japanese manufacturers improved for a second straight month and is seen returning to a positive reading in the coming few months, providing some evidence that the world's third-biggest economy is crawling out of a mild recession.
But the record annual trade gap of 6.93 trillion yen ($78.27 billion) in 2012 and the seventh consecutive monthly drop in exports show that improved sentiment has yet to translate into hard economic data.
Finance ministry data on Thursday showed that exports fell 5.8 percent in the year to December, more than economists' consensus forecast of a 4.2 percent drop.
The second consecutive annual trade deficit recorded by a nation that for decades had racked up hefty surpluses, helping to finance its ballooning debt, underlines the need for Prime Minister Shinzo Abe's government to strike a balance between economic growth and fiscal reform.
The 2011 shortfall was the first annual trade deficit since 1980, as exports struggled and Japan's shift away from nuclear power after the March 2011 earthquake and tsunami, with its subsequent nuclear crisis, boosted fossil fuel imports.
December data, however, are expected to be the low point and analysts expect the economy to gradually regain momentum this year.
"When calculating month-on-month figures, seasonally adjusted export volume actually increased a lot,
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