Japan's Exports Growth Turns Positive

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Japan's exports grew for the first time in 15 months in December led by increased demand from Asia, official data showed.

Exports climbed an annual 12.1% to JPY 5.41 trillion in December, reversing the 6.3% fall in the previous month, the Ministry of Finance reported on Wednesday. That was well above forecasts for 7.6% growth.

Exports to Asia, which accounted for more than 50% of Japan's total export revenue, surged 31.2% to JPY 3.03 trillion in December. China-bound exports jumped 42.8% to JPY 1.07 trillion.

Contrastingly, exports to the U.S. fell 7.1% to JPY 832.68 billion, while those to the European Union climbed a modest 1.4%.

The country breakdown offers a glimpse into the uneven nature of the global recovery and reaffirms the widely held view that Asia's emerging economies are driving the global economy from its slump.

Imports, on the other hand, continued to fall in December, although the pace of decline moderated. Imports were down 5.5% year-on-year to JPY 4.87 trillion, much slower than the 16.8% decline in the preceding month. That was better than forecasts for a 10.7% fall.

Imports from China dropped 5.8% to JPY 1.04 trillion, while those from the U.S. and the E.U. fell 9.5% and 6.4%, respectively.

In all, the country saw a merchandise trade surplus of JPY 545.32 billion in December, larger than the JPY 322.22 billion surplus recorded a year ago. Economists were looking for a surplus of JPY 633.3 billion.

The resurgent exports data offers a boost to the beleaguered Japanese economy, with the data coming on the back of the yen rising to a fresh one-month high this week. A strong yen diminishes the competitiveness Japan's trade merchandise as it makes them more expensive for potential buyers.

On Tuesday, the Bank of Japan opted to keep its benchmark interest rate unchanged at just above zero as it sought to maintain ultra-loose monetary conditions. The bank said the economy was improving, but further support measures were needed to maintain the recovery.

Japan's economy has been dogged by unemployment, deflation and a strong yen that has hurt the competitiveness of its goods in the export market. The economy grew for the second straight quarter between July and September, but its inability to overturn deflation has sparked fears that growth could stall. It pushed the government to unveil a JPY 7.2 trillion stimulus plan in December to prevent the country from slipping back into recession.

Japan's exports grew for the first time in 15 months in December led by increased demand from Asia, official data showed. (Market News Provided by RTTNews)