Reuters.com UPDATE 2-Japan exports to US dip, but offset by Asia demand http://www.reuters.com/article/economicNews/idUST1917120070524?pageNumber=1
Wed May 23, 2007 (Adds details, byline) By Leika Kihara TOKYO, May 24 (Reuters) - Japanese exports to the United States fell in April for the first time in more than two years, but firm shipments to Asia offset the drop and helped Japan's trade surplus expand by more than 50 percent. The trade data underscored concerns that exports to the Unites States, Japan's largest export destination, may be losing momentum, although analysts expect robust demand for Japanese goods in other parts of the world to keep supporting the nation's steady economic recovery. Japan's trade surplus expanded 51.8 percent in April from a year earlier to 926.7 billion yen ($7.62 billion), government data showed on Thursday, slightly less than analysts' median forecast of a surplus of 953.7 billion yen but increasing for the sixth straight month. Reflecting a slowdown in the U.S. economy, exports to the United States fell 4.8 percent from a year earlier to 1.34 trillion yen to mark the first decline in 27 months, the data showed. Largely behind the decline was a 7.5 percent fall in automobile exports, the first such drop in over two years and the sharpest fall since November 2003, said a Ministry of Finance official briefing reporters on the data. "Certainly the slower U.S. economy is affecting Japanese exporters," said Hiroshi Shiraishi, an economist at Lehman Brothers. "But on the whole, exports are holding up OK with the solid growth in Asia and Europe. Exports are continuing to grow, but the pace of growth seems to be moderating," he added. Indeed, exports to Asia grew 11.1 percent, with shipments to China climbing 16.8 percent. Exports to the European Union also grew a healthy 9.7 percent, the data showed, partly helped by the yen's weakness against the euro. Taken together, overall exports rose 8.3 percent to 6.64 trillion yen, buoyed by robust demand for Japanese steel goods in South Korea and firm automobile sales in Europe, Russia, Asia and the Middle East. Total imports grew 3.5 percent to 5.71 trillion yen, with airplane imports from the United States offsetting a decline in the value of crude oil imports, the data showed. Financial markets showed little reaction to the data. WEAK YEN HELPS Exports have been a key driver of Japan's economy, which grew a real 0.6 percent in January-March from the previous quarter to mark the ninth straight quarter of expansion. Some analysts have been wary that a slowdown in the U.S. economy, which posted its slowest growth in four years in the first quarter, could dent U.S. demand for Japanese goods and hurt Japanese economic growth. A recent Reuters poll showed that economists expect Japan's economic growth to slow to 0.3 percent in the second quarter of this year. Still, few analysts expect any serious blow from slowing exports to the United States, as shipments of Japanese goods to other destinations remain strong. "Exports to China will remain firm ahead of the Beijing Olympics," said Yasuo Yamamoto, a senior economist at Mizuho Research Institute. "Exports of steel and cell phones to Asia are also strong, helped by rising construction investment. Those will not be affected by a slowdown in the United States," he said. A weak yen also likely gave a boost to exports. The dollar stood at 118.27 yen on average during April, higher than 117.58 yen in the same month of the previous year, the trade data showed. On a seasonally adjusted basis, the overall customs-cleared trade surplus decreased 8.2 percent from the previous month to 1.03 trillion yen. Japan is currently enjoying its longest period of expansion in the post-war era, albeit at a slower pace than during previous growth phases, on the back of solid exports and robust corporate capital expenditures. © Reuters 2007. All rights reserved.
