Japan's Prime Minister Taro Aso, answering questions at the plenary session of the House of Representatives of the Diet.

Japan reported a ¥63.9bn ($666m) trade deficit in October, signalling that falling exports will push the country deeper into recession. Japan had reported the first deficit in 26 years, in August this year, when the economy was hit by high import prices and falling exports.

Japan's economy shrank for a second straight quarter in the three months ended Sept. 30th, following the US and Europe into recessions

Exports, the key engine of Japan's economic growth in the past six years, fell 7.7% from a year earlier, the biggest fall since December 2001, the Finance Ministry said today in Tokyo.

The October figures were the first deficit for the month in 28 years, reflecting a fall in exports to the rest of Asia.

Shipments to China, the US and Europe all fell.

Exports to Asia fell 4%; shipments to Europe plunged 17.2%, the largest decline since December 2001, and exports to the US dropped 19%.

Import costs remained high, despite the sharp fall in oil prices, the government said. Imports rose 7.4 per cent, for the 13th consecutive increase, due to high oil, coal and liquefied natural gas.