Export growth for October eases Japanese recession fears
Sharp jump in shipments and factory output could lift some of the gloom after data shows the country's surprise fall into recession
Japanese exports grew last month at the fastest pace in eight months, an encouraging sign that global demand could help the country recover from recession and support the central bank's optimistic economic outlook.
The 9.6 per cent annual rise in exports was more than double the 4.5 per cent gain expected by economists in a poll and faster than September's 6.9 per cent increase.
In another sign that the world's third-largest economy is regaining its footing, a private flash survey showed that factory output grew this month at the fastest pace since March.
Policymakers were stunned by data this week that showed the Japanese economy fell into recession as a sales tax increase weighed on consumer spending and business investment. But growing exports and output could help lift some of the gloom surrounding the economy.
"The trade data shows that exports will contribute to growth in the fourth quarter and help recoup some of the weakness we've seen in Japan's domestic demand," said Shuji Tonouchi, a senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.
Accelerating exports could also be a positive for Prime Minister Shinzo Abe, who has said he will call an election amid growing doubts about his economic policies.
Japan's exports jumped last month due to higher shipments of cars, ships and electronics, finance ministry data showed.
Exports to Asia, which account for more than half of the shipments, picked up to 10.5 per cent from a year earlier. Shipments to China slowed to a 7.2 per cent from an 8.7 per cent pace as the world's second-largest economy slows.
The expansion in exports to the United States doubled to 8.9 per cent.
Total imports rose 2.7 per cent, lower than the median poll estimate for 3.4 per cent.
Overall trade, produced a trade deficit of 710 billion yen (HK$47 billion), compared with a median estimate for a 1.05 trillion yen deficit.
The Markit/JMMA flash Japan manufacturing purchasing managers' index fell to a seasonally adjusted 52.1 from a final 52.4 last month. However, the output component of the index rose to a preliminary 53.5 from 51.3, reaching an eight-month high, suggesting companies are ready to ramp up production after a dip in demand.
"November data signalled positive growth in operating conditions for Japanese manufacturers," said Amy Brownbill, an economist at Markit.
