Japan’s exports rose for a ninth consecutive month in November, led by car shipments to the United States and China, a sign the weak yen and a recovery in global demand are energizing a major growth driver in the world’s third-biggest economy.
The 18.4 percent rise roughly matched the median estimate of a 17.9 percent increase from a Reuters poll of economists, and followed an 18.6 percent gain in October, Ministry of Finance data showed.
The weak yen, however, also inflated the cost of imported fuels resulting in a widening trade gap.
The persistent trade deficit could be a source of concern for Japanese policymakers who had hoped a weakening currency would be more of a boon for the economy by making Japanese goods cheaper overseas.
While the yen has fallen around 16 percent against the dollar this year, export growth has largely fallen short of early expectations, falling 0.2 percent in November from the previous month on a seasonally adjusted basis.
“The data confirmed a continued pickup in Japan’s exports reflecting a gradual recovery in global economy. It was a positive reading although the pace is unlikely to accelerate as global recovery remains tepid,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“Japan’s trade deficits will persist unless the nuclear reactors are restarted and global recovery accelerates suddenly, neither of which are likely to happen anytime soon,” he said.
Imports rose 21.1 percent in the year to November, versus a 21.4 percent rise expected, due to the weak yen and imports of fossil fuel to make up for energy lost since the nuclear shutdown following 2011’s Fukushima disaster.
The resulting November trade deficit of 1.29 trillion yen ($12.56 billion), against a 1.319 trillion yen deficit expected by economists, marked a record 17 straight months of deficits. It was the widest deficit since January’s record 1.6 trillion yen.
Weak net exports were the main reason Japan’s economic growth slowed in July to September as growth faltered in Japan’s Asian trading partners.
Economists expect growth to pick up heading into the new year, but many warn Japan will have to rely more on domestic demand for growth as net exports could remain weak.
The Bank of Japan is expected to keep monetary policy steady at its meeting ending on Friday, encouraged by an upbeat business sentiment survey that added to signs the BOJ’s stimulus campaign is spreading more broadly across the economy. (Reuters)