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Japan posts trade surplus for third month as imports slump

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Japan posted a trade surplus for a third straight month in November as imports continued to fall faster than exports. Exports declined at the slowest pace since September 2015.

[TOKYO] Japan posted a trade surplus for a third straight month in November as imports continued to fall faster than exports. Exports declined at the slowest pace since September 2015.

Exports fell 0.4 per cent in November from a year earlier (forecast -2.3 per cent), after declining 10 per cent in October, according to finance ministry data released on Monday.

Imports declined 8.8 per cent (forecast -12 per cent), following a 17 per cent drop the previous month.

Japan had a trade surplus of 536.1 billion yen (S$6.6 billion) in November.

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The results were released as the Bank of Japan begins a two-day monetary policy board meeting. The yen has weakened more than 10 per cent against the dollar since Donald Trump's election, raising the value of Japanese exports in US dollar terms and improving prospects for corporate earnings.

Net overseas shipments, which subtract imports from exports, was the biggest contributor to third-quarter economic growth. Confidence among large manufacturers has improved for the first time since June last year, according to the BOJ Tankan survey released this month.

"Overseas demand has been rebounding, along with a pick-up in the manufacturing sector globally," Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities Inc in Tokyo, said before the report was released. "The prospects for exports look good as the weakening yen will help."

"Japan's economy will likely have a positive growth rate this quarter. External demand looks solid, even as domestic demand may not be that strong," Mr Maruyama said.

"The weakening yen is helping to push up the value of exports. Also, demand in Asia, including China, is getting better," Atsushi Takeda, an economist at Itochu Corp in Tokyo, said before the data was released.

"Going forward, exports will likely continue to rebound."

Exports to the US dropped 1.8 per cent in November from a year earlier.

Shipments to the EU fell 2.2 per cent.

Exports to China, Japan's largest trading partner, gained 4.4 per cent.

BLOOMBERG

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