Japan’s export in better growth in November
Japan’s export growth improved for the first time in nine months in November, a possible sign that global demand is turning up again.
Exports from the world’s third-largest economy rose 9.1 percent from a year earlier, the government said Wednesday.
While exports have expanded throughout the year, the rate of growth has steadily fallen as overseas demand cooled and the yen rose to 15-year highs. In February, exports jumped more than 45 percent. By October, that had slid to less than 8 percent.
The slowdown triggered widespread concern about the fate of Japan’s recovery, which has depended heavily on exports.
The central bank on Tuesday kept interest rates on hold at virtually zero and maintained its cautious assessment of the economy. The recovery “seems to be pausing” and exports are flat, it said.
On Wednesday, the Cabinet Office went a step further in its monthly economic report. It cut its view on exports, describing them as “decreasing moderately.”
Companies are worried too, as Europe’s ongoing debt problems and possible monetary tightening in China add to the uncertainty. A key central bank survey last week showed that business sentiment fell for the first time in seven quarters.
Some economists predict that Japan’s gross domestic product contracted this quarter.
But the latest figures offer a hint of hope for Japan. Goldman Sachs economist Chiwoong Lee is optimistic about 2011 and expects the country’s exports to keep improving.
“With assistance from an easier yen, exports should sustain growth on the strength of the U.S. economy,” Lee said in a note to clients.
Exports to China, Japan’s biggest trading partner, rose 18.3 percent in November from a year earlier, the finance ministry said. Shipments to the European Union climbed 10.1 percent, while those to the U.S. rose a lackluster 1.2 percent.
Robust demand for general machinery, particularly from China, offset declines in electrical machinery such as semiconductors and audiovisual devices.
Imports rose 14.2 percent, shrinking Japan’s trade surplus for the month by 55 percent to 162.8 billion yen ($1.9 billion).
Injecting life into Japan’s economy is the government’s top priority as it faces falling approval ratings.
Last month, it passed a new $61 billion stimulus package with support for small businesses and regional economies. Then last week, Prime Minister Naoto Kan announced plans to cut the country’s corporate tax rate by 5 percentage points in a bid to help Japanese businesses stay competitive.
The government on Friday is expected to release a draft budget for the next fiscal year starting April.
If Japan’s economy doesn’t improve, the government may press the central bank for more help. With huge public debt, Japan has limited room for new stimulus spending.
“The government expects that the Bank of Japan will support the economy by appropriate and flexible monetary policy management while working closely with the government,” the Cabinet Office said.
Source: AP