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Japanese exports rise in November, surplus shrinks

Japanese exports rose for a seventh month in eight in November as a global economic rebound fueled demand for the nation's flat-panel displays, digital cameras and DVD players.

Exports rose 2.3 percent, seasonally adjusted, from October, the Ministry of Finance said in Tokyo. Imports rose 3.4 percent, narrowing the trade surplus by 1.7 percent to 1.02 trillion yen (US$9.45 billion.) Demand from the US, China and Europe is helping companies including Kyocera Corp overcome the effects of the yen's 10 percent gain against the dollar this year, sustaining a recovery from the third recession since 1991 in the world's No. 2 economy.

A stronger yen cuts exporters' profits and may make Japanese goods less competitive overseas.

"The yen's strength hasn't affected Japanese exports so far, and as long as the currency stays at about the current level, there won't be big concern," said Motomitsu Honma, an economist at Sumitomo Mitsui Asset Management Co.

The Cabinet office projected last week that Japan's economy will grow 2 percent in the fiscal year ending March 31 and 1.8 percent next year as manufacturers increase investment in machinery and equipment to meet rising overseas orders.

Japan's tertiary index, a measure of demand for services, rose 1.1 percent in October from September, the Ministry of Economy, Trade and Industry said in a separate report today.

The broader all-industry index rose 0.8 percent in October.

The all-industry index is used as a proxy for gross domestic product because it adds industrial production, construction, agriculture and government spending to the tertiary index.

Japanese manufacturers will increase production and spending next year to meet increasing demand for mobile phones, digital cameras and other electronic goods, according to the Japan Electronics and Information Technology Industries Association, whose members include Sharp Corp. and NEC Corp.

Growth in the US, the world's biggest economy, rose to an annual pace of 8.2 percent in the third quarter, and China's economy, Asia's second biggest, expanded 9.1 percent from a year earlier. The economy of the 12 euro nations grew 0.4 percent from the second quarter, the fastest pace in five quarters.

More business spending may also have contributed to the shrinking trade surplus this month, because Japanese companies imported more raw materials, said Masaki Kuwahara, an economist at Nomura Research Institute. A Bank of Japan report this month showed that companies plan to increase spending 11.1 percent this fiscal year.

"Business spending will continue to drive growth in the fourth quarter," Kuwahara said, saying the gains in exports and imports may offset each other, keeping the trade surplus "at a relatively high level."

The Bank of Japan has sold a record 17.8 trillion yen this year to stem the yen's gains.

The finance ministry is asking for authority to raise a total of 61 trillion yen for purchases of foreign currency.
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