TOKYO - JAPANESE exports posted a record annual fall in November as companies felt the pinch from a strong yen and weak global demand, data showed on Monday, adding gloom to an economy already in recession.

Plunging exports to Asia and the United States pushed the nation's trade balance into a deficit for the second straight month, underscoring the pain felt by the world's second-largest economy.

'Both exports and imports to almost all areas fell sharply,' said Mr Naoki Iizuka, senior economist at Mizuho Securities. 'The latest data shows the global downturn and the yen's appreciation are having a considerable impact.'

Japan reported a trade deficit of 223.4 billion yen (S$3.6 billion) in November as exports fell at their fastest-ever rate, official figures showed on Monday.

The deficit, which was larger than the market average forecast of 208 billion yen, reversed a surplus of 784.4 billion yen a year earlier.

Overall exports tumbled 26.7 per cent from a year earlier to 5,326.6 billion yen, the steepest decline in comparable data dating back to 1980, according to the finance ministry.

The decline came as the global credit crisis hurts Japan's major export destinations, with the United States in recession and once fast-growing Asia economies seeing slowing growth.

The dire economic conditions prompted the US Federal Reserve and the Bank of Japan to slash interest rates to close to zero last week.

US-bound exports plunged 33.8 per cent, also the fastest pace on record, to 993.9 billion yen while shipments to the European Union tumbled 30.8 per cent to 711.2 billion yen.

Exports to the rest of Asia fell 26.7 per cent to 2,577.5 billion yen.

Overall imports shrank 14.4 per cent to 5,550.0 billion yen on lower oil prices, marking the first drop in 14 months.

Japan has historically enjoyed a large trade surplus thanks to brisk demand for its cars and other goods but the recent financial turmoil and a strong yen has hit exports hard.

'Exports will probably be weak at least until the end of this fiscal year,' said Mr Maiko Noguchi, senior economist at Daiwa Securities SMBC. 'After that there will be some help from fiscal spending (by many countries) but it's still not clear the economy could recover sustainably.'

Japan, like the United States, is already in recession, with companies such as carmakers Toyota and Honda slashing output and profit forecasts.

The Fed's rate cut last week triggered a sharp yen rally to a 13-year high last week, adding to the pain for exporters which have already seen global demand slide.

The BOJ pushed its key policy rate down close to zero on Friday and moved to pump funds into the market to ease a corporate credit crunch, hoping to revive an economy battered by crumbling demand and a soaring yen. -- AFP, REUTERS