Nov. 19 (Bloomberg) -- Japan's trade surplus probably narrowed in October as manufacturers imported components used in the production of goods for export, economists said. The trade surplus probably narrowed a seasonally adjusted 4.6 percent to 941.2 billion yen ($8.6 billion) from September, according to the median of 16 forecasts in a Bloomberg News survey. The finance ministry is due to release the trade report at 8:50 a.m. tomorrow in Tokyo. Japanese companies are buying more imported components as they boost production in anticipation of rising overseas orders for cars, digital cameras and flat-panel displays. Capital spending by exporters including NEC Electronics Corp., the world's largest maker of chips for mobile phone displays, is driving the longest economic expansion since 1997. ``We're seeing a continuation of the export-led recovery,'' said Azusa Kato, an economist at BNP Paribas Securities in Tokyo, who estimates the surplus narrowed to 915.2 billion yen.
Capital spending and net exports accounted for all of Japan's 0.6 percent expansion in the three months to Sept. 30, the seventh consecutive quarter of growth. Gains in exports made up for consumer spending, which stalled in the third quarter. Exports rose for a sixth straight month in September as companies including Canon Corp. and Sony Corp. got a lift from accelerating growth in China and recoveries in the U.S. and Europe. Exporters have fueled the Nikkei 225 Stock Average's 30 percent rally from a two-decade low on April 28. The economy of the U.S., which buys more than a quarter of Japanese exports, grew at an annual pace of 7.2 percent in the third quarter, the fastest since 1984. China's economy grew 9.1 percent from a year earlier in the same period. The 12-nation euro zone economy returned to growth with a 0.4 percent expansion from the second quarter.
Higher Profits
Japanese manufacturers are increasing production as overseas orders rise. Industrial production rose 3.8 percent in September from August, the biggest gain in more than a year. ``Exports and production are strong, signaling that external demand will prop up growth,'' said Eishi Yokoyama, an economist at AIG Global Investment Corp. in Tokyo. ``Export-led growth will once again become the main characteristic of the economy.'' NEC Electronics this month said it would spend about 60 billion yen to build a production line at its existing plant in Japan to make chips from bigger silicon wafers. The line, which will be located in the northern prefecture of Yamagata, will have capacity to make 4,000 wafers per month. Matsushita Electric Industrial Co., the world's largest consumer-electronics maker by sales, said profit rose 45 percent to 20.4 billion yen in the three months ended Sept. 30, aided by an increase in demand for its Panasonic flat-screen televisions and DVD players in Asia and Europe. //www.bloomberg.com