Japan's Exports Rise to Record on Asia, Europe Demand

Japan's exports rose to a record in October as companies shipped more cars and electronics to Asia and Europe, easing concern that a slowdown in the U.S. will cool the economy's expansion.

Exports climbed 13.9 percent from a year earlier, the Finance Ministry said in Tokyo today, double September's pace. That helped lift the trade surplus 66.1 percent to 1.02 trillion yen ($9.3 billion) as imports gained 8.6 percent.

Shipments to China and the European Union surged to the highest ever, cushioning a drop in exports to the U.S., where the worst housing recession since 1991 is crimping demand. Toyota Motor Corp.'s profit rose 11 percent last quarter, helped by sales of Camry sedans in Europe and Asia.

Exports will probably remain the main driver of Japan's economic recovery this quarter, said Susumu Kato, chief economist at Calyon Securities in Tokyo. Demand in Asia and Europe will compensate for a slowdown in shipments to the U.S. for the time being.

The trade surplus will be tested this month as the yen's rise to a 1 1/2-year high against the dollar hurts exporters and oil approaching $100 a barrel increases the nation's import bill. Oil climbed above $99 for the first time in New York today.

Japan's currency has gained 5.3 percent against the dollar and 2.9 percent versus the euro this month. It traded at 109.62 per dollar at 12:29 p.m. in Tokyo from 109.83 before the report.

China, Asia

Shipments to China increased 19.2 percent to a record 1.17 trillion yen in October, faster than the 16.4 percent in the previous month, the ministry said. Export growth to Asia accelerated to 12.9 percent from a year earlier.

Manufacturers have turned to China and India, the fastest growing major economies, to shield them from a slowdown in the U.S., where a fifth of Japan's exports are sent. Toyota increased sales in China by 57 percent in the three months ended Sept. 30, helping offset a 5 percent decline in the U.S.

Source - Bloomberg