TOKYO -- Japan's trade with the rest of the world continued to sag in March, as a severe recession at home exacerbated the effects of the global downturn, the Japanese government said Wednesday.

Falling global trade has squeezed the world's second biggest economy, which shrank at an annualized 12.1% in the September-December period, and is expected to contract by a similar degree in the January-March period.

The trade balance for the fiscal year ended March 31 logged a deficit of ¥725.3 billion (7.34 billion). That was the first deficit since fiscal year 1980, the Ministry of Finance said.

With the country's recession-stricken businesses and consumers scaling back on foreign goods, imports fell 36.7% on year. Exports, meanwhile, plunged 45.6%. That gave Japan a trade surplus, at ¥11.00 billion, for the second straight month.

A surplus, meaning a country exports more than it imports, has traditionally signaled health for Japan's export-oriented economy. But March's surplus, like February's, highlighted distress, resulting from the drastic drop in imports outpacing the severe slide in exports.

While the surplus was slightly bigger than the ¥10.0 billion surplus expected on average by economists surveyed by Dow Jones Newswires and The Nikkei, it was still small by historical standards.

The data show that exports have now fallen for six straight months and imports for five. Analysts say the fall-offs are intertwined.

Weak overseas demand for Japanese cars, electronics and other high-end goods has forced companies like Toyota and Sony to cut production and jobs.

That has unsettled the broader economy, prompting job-wary consumers to curtail spending, slowing overall economic activity further. Imports of crude oil, semiconductors and food have fallen as a consequence.