Japan's Export Growth Unexpectedly Quickens to 7.7%

Japan's export growth unexpectedly quickened for the first time in three months, as shipments to Asia and Europe made up for declining U.S. sales.
TradingEconomics.com, Bloomberg 2/20/2008 7:21:42 PM

Exports, which contributed almost half of the economy's expansion last quarter, rose 7.7 percent in January from a year earlier after increasing 6.9 percent in December, the Finance Ministry said today in Tokyo. The median estimate of 18 economists surveyed by Bloomberg News was for a 6.6 percent gain.

Toyota Motor Corp. and Honda Motor Co. are relying on consumers in China, Russia and India to make up for waning demand in the U.S., Japan's largest market. Exports may cool this year as the U.S. slowdown spreads around the world.

Exports to Asia and Europe rose to a record for January, a month in which the volume of trade is lower because Japan's ports are closed for three days to celebrate the new year.

Shipments to Europe rose 10.6 percent, five times the pace of the previous month. Exports to Asia climbed 8.2 percent, the same rate as December, while those to China gained 4.6 percent.

U.S. exports, meanwhile, fell 3.2 percent from a year earlier, a fifth monthly drop.

Imports rose 9 percent in January because of higher oil costs, the ministry said, causing a trade deficit of 79.3 billion yen ($734 million), the first in a year. The median forecast of 35 economists was for a surplus of 8.2 billion yen.

The value of oil imports surged 41 percent, while the volume of the fossil fuel shipped to Japan rose only 1 percent, the ministry said. Japan tends to have a deficit in January, when ports are closed for the New Year holiday. The country had a shortfall of 3.5 billion yen in January 2007.

Japan's economy grew at double the pace economists expected in the fourth quarter, a report showed last week, as sales to Asia helped companies weather the U.S. slowdown.

Shipments to the U.S. accounted for only about 20 percent of total exports last year, compared with about 30 percent in 2000. In the same period, China's share jumped from 7 percent to 15 percent. Sales to Russia doubled in the past two years.