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Japan Trade Surplus Widens as Export Growth Quickens (Update3)
By Lily Nonomiya
June 21 (Bloomberg) -- Japan's export growth almost doubled in May, buoyed by shipments to China and the European Union and a rebound in U.S. demand.
Exports rose 15.1 percent from a year earlier, compared with 8.2 percent in April, the Ministry of Finance said today in Tokyo. The gain beat economists' estimates, helping the trade surplus widen 9.3 percent to 389.5 billion yen ($3.2 billion).
Manufacturers including Honda Motor Co., Japan's second- largest automaker, are enjoying higher demand from Asia, helping exports rebound after growing at their slowest pace in 18 months in April. Shipments to Europe rose at the fastest pace in nine months, helped by the yen's drop to a record against the euro.
``Exports overall continue to be solid, carried by increased shipments to Asia and Europe, and the yen's weakness is no doubt a help,'' said Junko Nishioka, an economist at ABN Amro Securities Japan. ``The worst seems to be over in the U.S. and that's a good sign for Japan.''
The yen traded at 123.61 per dollar at 10:02 a.m. in Tokyo compared with 123.54 before the report was published. The median estimate of 36 economists surveyed by Bloomberg News was for the trade surplus to widen to 462.7 billion yen.
Imports climbed 15.5 percent to a record 6.2 trillion yen, the ministry said, as a weaker yen increased the cost of goods purchased from overseas. Economists predicted imports to rise 10.3 percent and exports to increase 11.8 percent.
Europe, China
Net exports -- the difference between exports and imports -- were the biggest contributor to growth in the first quarter, helping Japan's economy expand at an annual 3.3 percent rate. The U.S. economy, the world's largest, only expanded 0.6 percent in the period, the slowest pace in four years.
Exports to the European Union surged 17.9 percent, the fastest pace since August, today's report showed. Shipments to China climbed 24.5 percent, the quickest rate in four months. Exports to the U.S. gained 0.4 percent after declining 5 percent the previous month, the first drop in two years.
U.S. growth is showing signs of accelerating. The Institute for Supply Management's factory index for May rose to the highest level in 13 months, and orders for business equipment climbed for a second straight month in April.
``We did have a big inventory adjustment in the U.S. in the first quarter but now a lot of indicators in terms of orders are turning around,'' said Amy Auster, head of international economics at Australia & New Zealand Banking Group Ltd. ``Japan's own export orders are actually looking fairly good.''
Honda's Exports
Automakers may be able to count on higher demand in coming months. Honda's exports rose 1.2 percent in April, accelerating from the slowest pace in 10 months, according to the most recent figures.
Honda's sales in China surged 33 percent in May, led by a fivefold increase in demand for its Civic compact car. The Tokyo-based automaker's sales in Asia's fastest-growing major economy are up 39 percent this year.
Still, some economists say exports are being propped up by the weaker yen and demand from the U.S. will remain slow in the coming months. Japan's currency fell to a 4 1/2-year low against the dollar this week and an all-time low of 166.12 per euro.
``Exports have been supported by a weaker yen, and the volume of shipments is decreasing,'' said Takeshi Minami, an economist at Norinchukin Research Institute in Tokyo. ``It'll take a few more months for the U.S. economy to gain momentum and for exports there to pick up.''
To contact the reporter on this story: Lily Nonomiya in Tokyo at lnonomiya@bloomberg.net
Last Updated: June 20, 2007 21:04 EDT
By Lily Nonomiya
June 21 (Bloomberg) -- Japan's export growth almost doubled in May, buoyed by shipments to China and the European Union and a rebound in U.S. demand.
Exports rose 15.1 percent from a year earlier, compared with 8.2 percent in April, the Ministry of Finance said today in Tokyo. The gain beat economists' estimates, helping the trade surplus widen 9.3 percent to 389.5 billion yen ($3.2 billion).
Manufacturers including Honda Motor Co., Japan's second- largest automaker, are enjoying higher demand from Asia, helping exports rebound after growing at their slowest pace in 18 months in April. Shipments to Europe rose at the fastest pace in nine months, helped by the yen's drop to a record against the euro.
``Exports overall continue to be solid, carried by increased shipments to Asia and Europe, and the yen's weakness is no doubt a help,'' said Junko Nishioka, an economist at ABN Amro Securities Japan. ``The worst seems to be over in the U.S. and that's a good sign for Japan.''
The yen traded at 123.61 per dollar at 10:02 a.m. in Tokyo compared with 123.54 before the report was published. The median estimate of 36 economists surveyed by Bloomberg News was for the trade surplus to widen to 462.7 billion yen.
Imports climbed 15.5 percent to a record 6.2 trillion yen, the ministry said, as a weaker yen increased the cost of goods purchased from overseas. Economists predicted imports to rise 10.3 percent and exports to increase 11.8 percent.
Europe, China
Net exports -- the difference between exports and imports -- were the biggest contributor to growth in the first quarter, helping Japan's economy expand at an annual 3.3 percent rate. The U.S. economy, the world's largest, only expanded 0.6 percent in the period, the slowest pace in four years.
Exports to the European Union surged 17.9 percent, the fastest pace since August, today's report showed. Shipments to China climbed 24.5 percent, the quickest rate in four months. Exports to the U.S. gained 0.4 percent after declining 5 percent the previous month, the first drop in two years.
U.S. growth is showing signs of accelerating. The Institute for Supply Management's factory index for May rose to the highest level in 13 months, and orders for business equipment climbed for a second straight month in April.
``We did have a big inventory adjustment in the U.S. in the first quarter but now a lot of indicators in terms of orders are turning around,'' said Amy Auster, head of international economics at Australia & New Zealand Banking Group Ltd. ``Japan's own export orders are actually looking fairly good.''
Honda's Exports
Automakers may be able to count on higher demand in coming months. Honda's exports rose 1.2 percent in April, accelerating from the slowest pace in 10 months, according to the most recent figures.
Honda's sales in China surged 33 percent in May, led by a fivefold increase in demand for its Civic compact car. The Tokyo-based automaker's sales in Asia's fastest-growing major economy are up 39 percent this year.
Still, some economists say exports are being propped up by the weaker yen and demand from the U.S. will remain slow in the coming months. Japan's currency fell to a 4 1/2-year low against the dollar this week and an all-time low of 166.12 per euro.
``Exports have been supported by a weaker yen, and the volume of shipments is decreasing,'' said Takeshi Minami, an economist at Norinchukin Research Institute in Tokyo. ``It'll take a few more months for the U.S. economy to gain momentum and for exports there to pick up.''
To contact the reporter on this story: Lily Nonomiya in Tokyo at lnonomiya@bloomberg.net
Last Updated: June 20, 2007 21:04 EDT
