Terror strikes deepen Japan trade slump

Air cargo was grounded after the attacks on the US

Japan's trade surplus has recorded its largest drop for more than 20 years, as a fall in shipments to the US since last month's terror attacks worsened an already poor export performance.

Between April and September, Japan's trade surplus fell by 43.1%, the biggest half-year drop since 1979, Ministry of Finance (MoF) figures have revealed.

Exports to the US, Japan's largest trading partner, have been badly affected, standing 11.9% lower last month than a year before.

Overall, Japan's trade surplus fell 18.3% in September from a year earlier to 1,060bn yen (£6.07bn; $8.76bn).

Economic uncertainty

Even before 11 September strikes, Japan's surplus with America had been showing small monthly declines, thanks to the US economic slowdown.

The MoF said it was unable to estimate, however, the extent to which the attacks had affected trade with Japan.

"Trade figures are affected by currency and oil price movements as well, so we cannot say anything certain about the impact of the attacks from these figures," a ministry spokesman said.

A slide of 14.6% in imports from the US was blamed largely on a grounding of air cargo planes following the attacks.

Monday's figures added to fears that Japan's economy, which shrank 0.8% in April-June from the previous quarter, could be contracting further.

A recession is generally defined as two successive quarters of economic contraction.