In January, Japan’s exports have fallen by 46 per cent. Japan’s economy was one of the first Asian economies to fall into recession last year as the slowdown in domestic demand crumpled under the effects of weakening demand from abroad.

In the fourth quarter of 2009, Japan’s economy contracted by 12.7 per cent from the year-earlier period.

The huge trade links between China and Japan are also under great pressure from the global economic crisis. According to the Japan External Trade Organization (JETRO), trade is set to shrink for the first time in 11 years in 2009 due to the ongoing global financial crisis.

“Japan is particularly vulnerable to this downturn because trade is so central to the economy,” World Trade Organization head Pascal Lamy told reporters on a visit to Tokyo.

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