Ja­pan ex­ports post bet­ter growth in Nov

The Pak Banker - - International -

TOKYO: 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 15year 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 main- tained 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. -Reuters

MINNEAPOLIS: Min­nesota Vik­ings back-up quar­ter­back Joe Webb (14) is sacked by Chicago Bears linebacker Lance Briggs (55) dur­ing the sec­ond quar­ter of their NFC, NFL foot­ball game at TCF Bank Sta­dium in Minneapolis, De­cem­ber 20, 2010. -Reuters

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.