By Robin Harding in Tokyo
Published: January 27 2010 01:41 | Last updated: January 27 2010 04:06
Source:  http://www.ft.com/cms/s/0/5c106e9e-0ae1-11df-8a26-00144feabdc0.html





Japan’s exports in December were 12.1 per cent higher than a year ago, the Ministry of Finance said on Wednesday, in a sign that economic recovery led by exports to Asia is on track.

The figures mark a rebound from weaker trade numbers in November. Economists at Goldman Sachs said that stronger-than-expected export growth might lead them to upgrade their forecast for Japan’s economic growth in the last quarter of 2009.


Compared with the previous month, exports were up by a seasonally adjusted 2.5 per cent, the 10th consecutive monthly rise.


Continued growth in exports is seen as essential to Japan’s recovery because there is little sign of a self-sustaining recovery in domestic consumer demand, even after a substantial fiscal stimulus.
If exports increase enough to absorb some of the weakness in Japan’s manufacturing sector, it should lead to increased employment and investment by companies, creating a more sustainable economic recovery.

Exports continued to be driven by the growth of Japan’s neighbours in Asia. Exports to China rose by 43 per cent and exports to Asia overall were up by 31 per cent.


There was a strong rise in exports used to feed China’s manufacturing industries. Exports of chemicals to China were up by 98.5 per cent on a year ago, exports of machinery were up by 38.9 per cent, and semiconductors were up by 49.5 per cent. Vehicle exports to China rose 94.2 per cent.


In a sign of just how dependent Japan is on emerging market growth, however, exports to the US fell 7.1 per cent even compared with a low figure in December 2008.


A separate data series from the Bank of Japan that adjusts for changes in export prices – a better guide to the underlying trend – will come out on Wednesday afternoon.