The gloomy news for the region coincided with a report Tokyo planned to jack up by 20-30 per cent insurance premiums for trade with Indonesia, Malaysia and Thailand in April, undercutting economic aid to Asia.

Finance ministry data showed Japan enjoying a surplus with the rest of Asia of 120.8 billion yen ($1 billion) in January as imports slumped during the deepest recession here since world war II. The Asian surplus compared with a deficit of 34.3 billion yen in January last year and was the first year-on-year improvement in Japan's trade with the region in 11 months. "In order for Asian countries to get out of economic slump, it is critical that Japan becomes the market to absorb their exports," said Shunta Yamato senior analyst at Daiwa Institute of Research.

"But given the stagnated domestic demand, it is clear that hey cannotcount on Japan for their economic recovery and in that sense Japan is not supporting economic recovery in Asia."

Taiyo Suzuki, senior economist at the Japan research institute agreed that the world's second biggest economy was enjoying a surplus with Asia "mainly due to a fall in imports. Japan's imports from the rest of Asia dropped 21.3 per cent from a year earlier to 1020.8 billion yen and exports were down 9.4 per cent to 1141.6 billion yen, according to finance ministry data.