Japan's exports rise at fastest pace in 30 years

10:10, March 25, 2010      

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Japan's exports climbed at the fastest pace in 30 years in February as global trade recovered from the worst postwar recession, increasing prospects for a sustained economic rebound in the nation.

Shipments abroad increased 45.3 percent from a year earlier, helping the trade surplus expand the most since 1982, the Finance Ministry said on Wednesday in Tokyo. At 5.1 trillion yen ($57 billion), the value of exports remains about a third lower than the March 2008 peak of 7.7 trillion yen.

Demand for Japanese goods rose to all regions for the first time since August 2007, the report showed, fueling sales for companies from Komatsu Ltd to Mitsubishi Electric Corp. The trade revival has spurred factory production for 11 months, gains that economist Akiyoshi Takumori expects will continue.

"Before, exports were rising mostly because of Asia, but now the US economy is rebounding, too. That's definitely a good sign," said Takumori, chief economist at Sumitomo Mitsui Asset Management Co in Tokyo. "It's very unlikely that Japan's recovery will falter this year."

The yen traded at 90.52 per dollar at 12:42 pm in Tokyo from 90.40 before the report. The Nikkei 225 Stock Average rose 0.1 percent. The increase in exports was in line with the 45.7 percent median estimate of 17 analysts surveyed by Bloomberg.

The surge was partly due to a favorable year-on-year comparison. In February 2009, shipments abroad tumbled a record 49.4 percent as global trade froze following the collapse of Lehman Brothers Holdings Inc five months earlier. Exports fell a seasonally adjusted 1.7 percent from January.

Last month's rebound was driven by Asia, especially China, though the pace of the gains moderated as the lunar new year holiday took place in February this year and January in 2009.

Shipments to Asia advanced 55.7 percent in February from a year earlier, compared with a 68.1 percent gain the previous month. Exports to China, Japan's biggest overseas market, climbed 47.7 percent after rising 79.9 percent in January.

"Asian economies will likely maintain their robust recovery, helping Japan to sustain growth in exports," said Takahide Kiuchi, chief economist at Nomura Securities Co in Tokyo.

Mitsubishi Electric on Wednesday forecast net income of 25 billion yen in the year ending March 31, reversing its previous estimate for a 20 billion yen loss.

The maker of consumer electronics and assembly line machinery cited demand from Asia, worldwide stimulus and cost cuts.

Komatsu, the world's second-biggest maker of large dump trucks and excavators, expects sales in China to climb between 40 percent and 50 percent in the year starting April 1, Kazuhiko Iwata, president of the company's mining division, said this month.

Demand in the US also picked up from a year ago. Shipments to the world's biggest economy surged 50.4 percent in February, the most since May 1984, the ministry said. Sales to Europe rose 19.7 percent, the third consecutive increase.

Imports climbed 29.5 percent, the fastest pace in three years. The trade surplus swelled to 651 billion yen, nine times bigger than the gap a year ago. The median estimate of 22 analysts surveyed was for 560.6 billion yen.

Recent reports show the rebound is spreading to the domestic economy. The unemployment rate fell to a 10-month low of 4.9 percent in January, bolstering consumer confidence. Service demand rose the most in more than a decade.

The Japanese government last week raised its assessment of the economy for the first time in eight months, saying the recovery is beginning to spur corporate earnings, home building and consumer spending.

Source:China Daily
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