Japan's exports rose in January at the fastest pace in two years as US orders rebounded and the yen weakened, a sign rising overseas demand for Honda Motor Co cars and other goods may shorten a recession.
Exports rose 8.5 percent last month from December, seasonally adjusted, the Ministry of Finance said -- the biggest increase since February 2000. That boosted the trade surplus to ?666.5 billion (US$23.3 billion) from a revised ?475.6 billion, beating economists' expectations.
The increase in exports suggests the government's policy of weakening the yen is working. An economic rebound in the US -- Japan's biggest overseas market -- is also helping exporters and may help pull the world's second-largest economy out of a 16-month recession, analysts said.
The threat "of a severe recession should start to fade," said Richard Jerram, chief economist at ING Barings Japan Ltd, who expects exports to keep rising this quarter.
"A rise in exports isn't going to solve all of Japan's problems -- it's still left with problems of domestic deflation and a distressed banking system."
Car exports gained 25 percent in January from a year earlier, and steel exports rose 27 percent, yesterday's report showed. Honda, Japan's second-biggest automaker, exported 21 percent more last month than a year earlier.
The yen had its biggest gain in more than a week on expectations that companies will use their export earnings to buy more yen. The currency rose as high as ?133.70 per dollar from ?134.15 in New York late Friday and traded recently at ?133.96.
The benchmark Nikkei 225 stock index fell 0.6 percent.
The yen's 13.5 percent decline against the dollar in the past year boosts the value of exporters' overseas earnings when converted back into yen and allows Japanese companies to discount their products overseas without reducing their sales in local-currency terms.
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