Japan's export growth accelerates for second month
Japan's export growth accelerated for the second straight month in December, indicating a revival of overseas demand critical to the country's recovery.
Exports from the world's third-largest economy rose 13 percent from a year earlier on greater shipments of machinery and motor vehicles, the finance ministry said Thursday. North American demand was especially strong, reflecting an improving U.S. economy.
The export growth beat market expectations and is an improvement from the 9.1 percent year-on-year growth recorded in November. The news boosted the Japanese stock market, with the Nikkei 225 stock average rising 0.8 percent to 10,488.06.
Exports have been a key driver of Japan's economy - home to major manufacturers like Toyota Motor Corp. and Panasonic Corp. - which has relied on the rest of the world to offset lackluster demand at home. A steady slowdown in export growth between February and October last year, as well as a strong yen, had triggered concerns that the economy was faltering.
Economists are more optimistic about 2011. A strengthening global economy usually translates to more orders for Japanese goods.
"As the yen appreciation trend seems to have run out of gas, we think exports should sustain growth on the strength of the US economy," said Yuriko Tanaka, an economist at Goldman Sachs in Tokyo, in a note to clients.
On Tuesday, the central bank upgraded its economic outlook for the fiscal year ending March 31. It now expects real gross domestic product to expand 3.3 percent, up from 2.1 percent forecast in October.
While the Bank of Japan maintained its assessment that the country's recovery "seems to be pausing" and that exports were "somewhat weak," it predicted that the economy will gradually find its footing again.
Imports rose 10.6 percent in December. That resulted in a 34 percent bigger trade surplus of 727.7 billion yen ($8.8 billion).
Exports to China, Japan's biggest trading partner, rose 20.1 percent in December from a year earlier, according to the finance ministry report. Shipments to the U.S. climbed 16.5 percent, while those to the European Union rose 9.7 percent.
For the 2010 calendar year, Japan's exports rose 24.4 percent, marking the first annual expansion in three years. Shipments to China hit a record high of 13.09 trillion yen ($160 billion), accounting for more than 19 percent of Japan's exports.
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