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Japan's record exports to Asia raise hopes for Q4 growth
[TOKYO] Japan's exports grew for a 13th straight month in December, led by record demand from China and Asia as a whole, raising the prospects for vigorous economic growth in the fourth quarter.
The Ministry of Finance (MOF) said on Wednesday that exports rose 9.3 per cent in December from a year earlier, versus a 10.1 per cent gain seen by economists and following a 16.2 per cent gain in November.
The value of exports to China, Japan's largest trading partner, rose 15.8 per cent year-on-year in December led by semiconductor production equipment and electronics parts, hitting a record 1.5 trillion yen (S$17.9 billion).
Shipments to Asia, which account for more than half of Japan's exports, grew 9.9 per cent in the year to December, reaching a record 4.1 trillion yen.
In volume terms, Japan's exports rose 4.5 per cent in the year to December, the 11th consecutive month of gains, the data showed.
Robust foreign demand for Japanese goods could help stoke a virtuous cycle of business investment, consumer spending and growth in Japan's economy, the world's third largest.
A recent batch of indicators showed Japanese manufacturers' confidence hit an 11-year high in January, while a key gauge of capital expenditure revealed Japanese firms' readiness to spend their record cash pile on plant and equipment.
Some analysts warn of the possibility that US President Donald Trump may intensify US protectionism and redouble his condemnations of US trade imbalances - especially in light of mid-term elections later this year.
Exports to the United States rose 3.0 per cent in the year to December, led by construction and mining machinery, following a 13.0 per cent gain in the previous month, Wednesday's data showed.
Japan's trade surplus with the United States fell an annual 1.0 per cent in December to 712 billion yen, posting the first decline in six months.
Japan and the United States are set this week to discuss a framework of negotiations intended to conclude a trade pact and fix bilateral trade imbalances, US envoy William Hagerty said in an interview with Japanese public broadcaster NHK.
The data follows the Bank of Japan's decision on Tuesday to keep monetary policy steady as it offered a more upbeat view of inflation expectations, showing its conviction a strengthening recovery will gradually push price growth to its 2 per cent target.