Weak yen lifts Japan exports further

Japan's exports rose for a fourth month in June as a weak yen made the country's products more competitive and shipments to the European Union rebounded.

Exports gained 7.4 per cent from a year earlier, the Finance Ministry said in Tokyo yesterday. While the increase was the first for June exports since 2010, shipping lines slid after the number missed the 10 per cent median estimate of economists surveyed.

The yen's 22 per cent decline against the US dollar over the past year is helping Prime Minister Shinzo Abe to build momentum for a sustained Japanese recovery. The government yesterday raised its assessment of the economy for a third month after an upper-house election victory that strengthens Abe's hand for rolling out business deregulation.

"The effect of the yen's weakness on exports is becoming very clear," said Junko Nishioka, chief economist at Royal Bank of Scotland in Tokyo and a former Bank of Japan official. "The outlook for the Japanese economy is improving now and there are more factors to back up an optimistic view than negative factors."

Imports climbed 11.8 per cent, leaving a trade deficit of 180.8 billion yen (HK$14 billion). While the yen's decline aids exports, it also pushes up the country's bill for imports, including the extra energy needed because of nuclear plant shutdowns.

Japan's shipments to the EU climbed 8.6 per cent from a year earlier, the first gain in 21 months, after falling 21 per cent last year. Exports to the United States rose 14.6 per cent, while those to China gained 4.8 per cent.