TOKYO, Jan 26 - Japan's exports rose in December, helped by surging demand for electronics and semiconductor components and a booming Chinese economy, pointing to continued progress for Japan's economic recovery. The rise in exports helped push the December trade surplus up 41.2 percent from a year earlier to 1.1216 trillion yen ($10.53 billion), Finance Ministry data showed on Monday, up for a sixth straight month and beating a median forecast of 1.0800 trillion yen in a recent poll. "It's quite a big amount, reinforcing views that Japan's exports are being supported by the U.S. economic recovery since last summer and by the strength of the Chinese and other Asian economies," said Hidenori Suezawa, chief strategist at Daiwa Securities SMBC. Japan's emergence from its 10-year economic doldrums is being fuelled by demand for Japanese goods in recovering world markets.
Japan's top automakers showed on Monday that global sales and overseas output had been robust. Toyota Motor Corp <7203.T> said its group -- which includes truck maker Hino Motors <7205.T> and minicar maker Daihatsu Motor <7262.T> -- sold 6.78 million vehicles last year, up 10 percent from 2002 as it boosted its presence in every major car market. The MOF figures showed exports in December were up 8.5 percent from a year earlier and up 1.6 percent from a month earlier on a seasonally adjusted basis. Demand is strong from China, which is sucking in consumer and capital goods for an economy that grew some nine percent in 2003. Exports to China surged 32.4 percent, in contrast with a 7.8 percent fall in the value of exports to the United States. Japan's surplus with the United States fell for the 12th straight month to 558.8 billion yen. While the United States remains Japan's largest single export destination, exports to China have more than doubled in value in five years, while U.S.-bound exports are little changed in value. "A decline in exports to the United States has been offset by robust exports to Asia and the euro zone," a MOF official said. Analysts see signs, however, that a recovery in the U.S. economy could be starting to reverse the decline. "Earlier in the year, brisk shipments to China were virtually the only positive factor for Japan's exports," said Azusa Kato, an economist at BNP Paribas. "But it seems that the steep decline in U.S.-bound exports is bottoming, at least on a volume basis." For calendar 2003, Japanese exports were at a record 54.6 trillion yen, surpassing the previous year's record figure. Exports to Asia and China were also at record levels.
YEN A CONCERN
Imports in December were up 1.6 percent year-on-year, but fell 0.6 percent month-on-month. Imports for 2003 were at a record 44.3 trillion yen, mostly for oil and energy-related products due to concerns about the war in Iraq and because output at a number of Japan's nuclear reactors was halted last year. Tokyo Electric Power Co Inc <9501.T>, Japan's biggest power utility, was forced to shut down all 17 of its reactors after admitting it falsified nuclear safety documents. The trade surplus for calendar 2003 was 10.2 trillion yen, above the 10 trillion yen mark for the first time in three years. But the strength of the yen is likely to be a continuing concern for exporters, threatening to reduce their profits when overseas earnings are converted to yen and making their products more expensive. "The strong yen is of course a negative for exports, but for now it is being offset by strong demand," said Mamoru Yamazaki, chief economist at Barclays Capital in Tokyo. The yen has been rising steadily despite massive intervention by Japanese authorities, who sold a record of some 20 trillion yen in the currency market last year to slow the yen's rise. Bank of Japan Governor Toshihiko Fukui voiced his concern at the yen's strength on Monday, telling a branch managers' meeting that moves in the foreign exchange markets require attention. But few in the financial markets expect a meeting of the Group of Seven industrial nations on February 6 and 7 in Florida to reverse the dollar's decline, a survey jointly conducted by and Japan's Jiji Press news agency showed on Monday. ($1=106.47 Yen)//