Page last updated at 08:02 GMT, Friday, 27 March 2009

Japan's retail woes add to slump

Japanese shoppers walk through the Shibuya district of Tokyo
Japanese shoppers are spending less

Retail sales in Japan saw their biggest fall in seven years in February, adding to fears of a deepening recession.

Shoppers spent 5.8% less than a year earlier, bringing the total value of sales to 9.98tn yen ($101bn), according to government figures.

The figure is more than twice January's year-on-year decline of 2.4% and is the sixth monthly decline in a row.

Meanwhile, South Korea and Vietnam also reported weak economic data, as the slowdown hits Asia's economies.

South Korea's economy grew less than first estimated in 2008, expanding 2.2%, compared with a initial estimate of 2.5%.

Vietnam's economic growth rate slowed to 3.1%, its lowest rate in a decade, according to an estimate for the first quarter.

Deflation fears

In Japan, consumer price inflation remained unchanged for a second month in a row.

The Consumer Price Index (CPI) figures, which exclude volatile fresh food prices, prompted analysts to warn that Japan was on the brink of a return to the deflation that plagued it in the late 1990s.

"We are expecting deflation to last for two years, well into 2010," said Hiroshi Watanabe, an economist at Daiwa Research Institute.

'Worst crisis'

The figures were the latest in a stream of grim statistics charting Japan's economic woes.

The country's exports saw a record plunge of 49.4% year-on-year in February, as worldwide demand for its products collapsed.

Japan's economy contracted by 3.3% in the last quarter of last year - its worst showing since the oil crisis of the 1970s.

Economic Minister Kaoru Yosano has said Japan is facing its worst economic crisis since the end of World War II.



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