Japanese export growth accelerates in October

Japanese exports grew in October at the fastest pace in eight months in an encouraging sign that global demand could help the country recover from an unexpected recession and support the central bank’s optimistic economic outlook.

The 9.6 per cent annual rise in exports in October was more than double the 4.5 per cent gain expected by economists in a Reuters poll and faster than September’s 6.9 per cent year-on-year increase.

Policymakers were stunned after data this week showed the economy fell into recession as a sales tax hike weighed on consumer spending and business investment. But growing exports could help lift some of the gloom surrounding the economy.

Accelerating exports could also be a positive for the government as Japanese prime minister Shinzo Abe has said he will call an election amid growing doubts about his economic policies.

Japan’s exports jumped in October due to higher shipments of cars, ships and electronics, finance ministry data showed.

Exports to Asia, which accounts for more than half of Japanese shipments, rose 10.5 per cent in October from a year ago, faster than an 8.1 per cent rise to September. Shipments to China slowed to a 7.2 per cent annual rise in October from an 8.7 per cent pace the previous month as the world’s second-largest economy slows.

Exports to the United States rose an annual 8.9 per cent in October, versus a 4.4 per cent increase in September.

Imports rose 2.7 per cent year-on-year to October, lower than the median poll estimate for 3.4 per cent.

October produced a trade deficit of 710.0 billion yen ($6.01 billion), versus the median estimate for a 1.05 trillion yen deficit.

The Bank of Japan left monetary policy unchanged on Wednesday, but there are concerns its surprise expansion of monetary easing last month is still not enough to guide inflation to its 2 percent price target as growth has consistently missed expectations.

Reuters