Japan's trade surplus last month rose 8.8 percent as exports hit a record high on strong demand for ships, automobiles and steel even as export growth overall slowed, official figures showed yesterday.
The slowdown in export growth does cause concern that Japan's export-led recovery may not be sustainable but analysts expressed confidence that Chinese demand for Japanese goods would remain strong enough to cushion any decline.
At the same time, they said there appears to be no immediate sign that the recent weakening of the dollar, which undercuts the competitive position of Japanese exports, is beginning to hurt shipments overseas.
Japan's trade surplus totalled ?1.16 trillion (US$11.3 billion) last month, posting the 15th increase in 16 months, the finance ministry said. Economists had expected a trade surplus of some ?1.08 trillion.
Exports rose 11.8 percent to ?5.48 trillion, while imports expanded 12.6 percent to ?4.31 trillion on higher crude oil and coal imports.
In September, the trade surplus rose 12.4 percent from a year earlier, as exports grew 12.4 percent and imports increased 12.5 percent.
"Exports remained firm [in October] although their growth rate is dropping," said Toshio Sumitani, economist at Tokai Tokyo Research Center.
"Exports are likely to slow in the months to come, resulting in a smaller trade surplus," Sumitani said, while stressing that any decline in the surplus would be gradual as China takes up the slack.
"The Chinese economy is not slowing as much as anticipated. As long as Chinese demand is strong, a slowdown in exports may be minor."
Japan's trade surplus with Asia rose 31.7 percent to ?692.3 billion, with exports up 12.6 percent to ?2.63 trillion and as imports grew 7.1 percent to ?1.93 trillion.
The trade surplus with the US fell 1.2 percent to ?613.6 billion as exports rose 3.4 percent to ?1.23 trillion and imports increased 8.4 percent to ?620.4 billion.
The surplus with the EU grew 21.6 percent to ?332.8 billion. EU-bound exports gained 10.8 percent to ?847.8 billion, while imports rose 4.8 percent to ?514.9 billion.
Juichi Wako, an economist at Nomura Securities Financial Research Institute, said "the October figures came as no surprise. Imports rose due to higher oil prices but exports stood at a record high for a single month.
"They remain firm ... [and] not as bad as initially expected," Wako said.