Japan October Export Growth Slows


Japanese exports grew at their slowest pace of the year in October, data showed on November 25, underlining fears for the country's main engine for growth as the trade-reliant recovery loses more steam.

The worse-than-expected data pointed to growing concerns that Japan's economy faces a slowdown as a strong yen and slowing overseas demand threaten to further weaken exports as industrial production slows.

Overseas shipments rose by a slower-than-expected 7.8 percent from a year ago, missing market expectations of 10.2 percent growth, the finance ministry said.

It was the slowest export growth since November last year, which saw a 6.3 percent contraction before shipments rebounded the following month.

The October exports figure compared with a 14.3 percent rise growth in September and a 15.5 percent rise in August, the finance ministry said.

Amid economic jitters in the eurozone, Japan's exports to the EU nations fell 1.9 percent, the first fall in 11 months, while imports from Europe rose 1.9 percent.

US-bound shipments rose by a modest 4.7 percent, the lowest pace of growth since December 2009, when exports fell.

The growth of Asian demand was also waning, but China maintained a robust appetite for Japanese products.

China-bound exports grew 17.5 percent, rebounding from a 10.2 percent rise in previous month, while imports from China rose 9.8 percent.

The currency has been trading at 15-year highs against the dollar, hammering the competitiveness of the crucial export sector.

A strong yen not only makes Japan's growth-driving exports more expensive but erodes companies' overseas profits when repatriated, with many firms considering sending more production overseas as a result.

The country's exports for the month reached 5.72 trillion yen (68.5 billion dollars), the 11th straight monthly increase, led by automobiles and engines, the finance ministry said.

Imports also rose 8.7 percent to 4.90 trillion yen, expanding for the 10th consecutive month as they were driven up by demand for iron ore, coal and liquid natural gas.

Japan's trade surplus rose 2.7 percent to 82.19 billion yen (984 million dollars), marking the second consecutive monthly increase.

 


TradingEconomics.com, AFP
11/25/2010 8:35:37 AM