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By Leika Kihara
TOKYO, Dec 22 (Reuters) - 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 Naoki Iizuka, senior economist at Mizuho Securities. "The latest data shows the global downturn and the yen's appreciation are having a considerable impact."
Exports plunged a record 26.7 percent in November from a year earlier, bigger than a median market forecast for a 20 percent decline, the Ministry of Finance data showed.
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 U.S. Federal Reserve and the Bank of Japan to slash interest rates to close to zero last week.
Exports to the United States plummeted 33.8 percent, marking the biggest year-on-year decline on record, the ministry said.
Shipments to Asia fell 26.7 percent, the biggest annual fall in more than two decades. Exports to China slipped 24.5 percent, marking the largest decline since 1995.
Imports were down 14.4 percent in November.
As a result, Japan logged a trade deficit of 223.4 billion yen ($2.50 billion) in November, a smaller deficit than a median market forecast of 257.5 billion yen but suffering red ink for the second straight month.
The last time Japan logged a trade deficit for two straight months or longer was in October-November 1980, when Japan was suffering from a strong yen and trade friction with the United States, a ministry official said.
"Exports will probably be weak at least until the end of this fiscal year," said 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. (Editing by Chris Gallagher)