Japanese Exports Fall at Slower Pace

Japan’s exports fell in June at the slowest pace this year as demand picked up worldwide, helping the trade surplus widen for the first time in 20 months and setting the stage for an economic recovery.
TradingEconomics.com, Bloomberg 7/22/2009 11:18:23 PM

Shipments abroad declined 35.7 percent from a year earlier, after dropping 40.9 percent in May, the Finance Ministry said today in Tokyo. The surplus widened to 508 billion yen ($5.4 billion).

Faster growth in China is propping up sales for Japanese manufacturers including Komatsu Ltd. and Nissan Motor Co. The recovery in shipments from the record collapse spurred by the financial crisis probably helped the economy grow for the first time in more than a year last quarter.

The Bank of Japan last week raised its assessment of the economy for a third month, citing rebounds in trade and factory production. Economic conditions have stopped worsening,” the central bank said.

Economists predicted exports would decrease 35.1 percent. From a month earlier, shipments rose 1.1 percent.

Demand picked up in all regions. Exports to China fell 23.7 percent last month from a year earlier, the smallest drop since October. Shipments to the U.S. declined 37.6 percent, the least since December, and sales to Europe slid 41.4 percent, also the best this year.

The International Monetary Fund said this month the global economic rebound next year will be stronger than it predicted in April, raising its forecast for world growth to 2.5 percent for 2010 from an April estimate of 1.9 percent.

China, which grew 7.9 percent last quarter, has surpassed the U.S. as Japan’s biggest export customer. Government subsidies to encourage consumer spending and investment in building projects have benefited Japanese manufacturers.

Japan will still need demand to pick up from the U.S. and elsewhere because about half of Japan’s exports to China are parts and materials used to make products that are re-exported, according to Nikko Citigroup’s Murashima.

Japanese Exports Fall at Slower Pace