Thursday, January 27, 2011

Japanese exports surge 13 per cent

Japanese exports accelerated for the second month in December, adding to the optimism in Davos about the recovery in the global economy.

Shipments from Asia’s second-largest economy rose 13 per cent last month, compared to a year earlier, to Y6,112bn ($73.6bn), faster than November’s 9.1 per cent rise, according to statistics from the Ministry of Finance released on Thursday. Exports to the US were particularly strong, gaining 16.5 per cent.

Imports also grew but at a slower pace than in November. As a result, the trade surplus expanded 34.1 per cent to Y727.7bn, the fastest since September and more than economists had estimated.

The recent acceleration ties in with the moderate confidence in the global recovery being expressed at the World Economic Forum in Davos, and the International Monetary Fund’s forecast that the global economy will grow at a pre-crisis rate over the next couple of years.

It also helps to fuel confidence that the Japanese economy can continue to expand in spite of the end of domestic stimulus measures.

Japan’s stronger exports to the US also reflect comments by Zhu Min, a special adviser to the IMF, who on Wednesday described a “three-speed” recovery. He said that while emerging economies would continue to expand much faster than developed countries, the US would benefit from ongoing stimulus, while other advanced economies would grow slowly as they shift to austerity measures.

Although the yen remains close to 15-year highs at Y82.13, the Japanese currency has recently been less volatile and some economists, such as Yuriko Tanaka at Goldman Sachs, are not expecting the yen to climb much higher, which should help exports.

“As the yen appreciation trend seems to have run out of gas, we think exports should sustain growth on the strength of the US economy,” said Ms Tanaka.

The yen’s sharp climb against the US dollar during 2010 had been weighing on exports and business confidence. In September, the strength of the yen forced the finance ministry to intervene in the currency markets for the first time in more than six years.

On a seasonally-adjusted basis, export volumes grew 8.5 per cent in December, close to levels not seen since the financial crisis, according to estimates from Credit Suisse. The finance ministry does not provide data for volumes, which are a better guide to activity in the Japanese economy and demand from overseas.

The Bank of Japan earlier this week raised its real gross domestic product growth forecast for the year ending in March to 3.3 per cent from its October forecast of 2.1 per cent.

“Japan’s economy is expected to gradually overcome the deceleration in the pace of improvement and return to a moderate recovery path as the growth rate of the global economy is likely to start increasing again led by emerging and commodity-exporting economies,” the BoJ said.

Markets welcomed the trade figures and the Nikkei 225 gained 0.8 per cent to 10,482.77 in early afternoon trading.

Source: http://www.ft.com

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