Japanese exports soar 45% on year

| March 24, 2010 | 0 Comments

Official figures today from the finance ministry showed Japanese exports surged 45.3% in February to 5.13 trillion yen (£37.3 billion, $56 billion), the fastest year-on-year growth in 30 years.

However, exports are still around 25% lower than levels seen in 2008 but the situation has improved significantly since shipments slumped a year ago.

Global demand for Japanese cars, electronics and other goods are recovering after a slump during the global economic downturn.

Japan was one of the first major economies to emerge from recession in the second quarter of last year as a result of a rebound in exports.

Meanwhile, imports in the world’s second largest economy grew 29.5% to 4.48 trillion yen, due to higher oil prices and nonferrous metals.

As a result, Japan’s trade surplus surged more than nine-fold to 651 billion yen from 70.8 billion yen a year earlier - exceeding market forecasts.

Commenting on the data, Naoki Murakami, chief economist at Monex Securities, said: “Exports, the driving force of a recovery in Japanese corporate earnings, have maintained their steam.

“The momentum in the global economic recovery is becoming stronger thanks to a US rebound since late 2009,” Murakami added.

Meanwhile, Japan’s exports to China rose 47.7% on the back of strong shipments of cars and parts and according to one analyst, if China’s economy continues to grow strongly, Japan will benefit.

Despite the good results, Japan continues to grapple with deflation and last week, the Bank of Japan (BoJ) elected to keep interest rates at the low level 0.1% in a bid to fight off deflation.

However, deflation remains a problem for the economy. Core consumer prices fell 1.3% in January against a year ago, representing the 11th consecutive monthly fall.

A short period of deflation (where prices fall rather than increase) could be a serious threat to the economy because it deters consumers and businesses from spending in expectation of falling prices.

Deflation was a problem for Japan during its so-called “Lost Decade” in the 1990s in which the economy struggled with falling prices.

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