Japan exports see 'modest recovery'

Export slump eases, raising hopes that worst of global trade spiral may be over.

    The slower declines extended across product categories, including vehicles and electronics [EPA]

    Naoki Murakami, chief economist at Monex Securities, told the AFP news agency that the finance ministry data on Wednesday "confirmed exports were recovering" after volumes increased for two consecutive months.

    Japan's factory production rose for the first time in six months in March and data due out on Friday is expected to show the first back-to-back increases in output in more than a year in April.

    Stronger shipments to China

    "Exports are likely to recover gradually from now on and the Japanese economy is expected to follow suit"

    Yoshiki Shinke,
    senior economist, Dai-ichi Life Research Institute

    Shipments to China, Japan's biggest trade partner, fell 25.8 per cent in April from a year earlier, narrowing the margin of decline for a third straight month and suggesting Beijing's $585bn stimulus package was having an effect.

    Yoshiki Shinke, a senior economist at Dai-ichi Life Research Institute, said the positive signs were due to "progress in inventory correction overseas and a pickup in shipments to China".

    "Exports are likely to recover gradually from now on and the Japanese economy is expected to follow suit," he told the Reuters news agency.

    Japan posted an annual deficit last year, its first in 28 years. And last week it announced that its economy suffered its sharpest contraction on record in the three months to March, shrinking four per cent compared with the previous quarter.

    The Japanese government has tried to stimulate spending and increase output [AFP]
    In an effort to ease the recession, the government has announced a series of economic stimulus packages, including a $163bn injection unveiled last month.

    The government upgraded its assessment of Asia's biggest economy for the first time in more than three years this week, saying that while the situation was still tough "the tempo of worsening has become moderate".

    Masaaki Shirakawa, the Bank of Japan governor, said on Monday that the country's economy may return to positive growth in the quarter to June, predicting a "mild recovery".

    Caution

    Some analysts remain cautious, however, on whether global demand will recover enough to prompt Japanese companies to go beyond restocking after a heavy run-down of inventories.

    Monex Securities' Murakami conceded that "the pace of the recovery in exports is not very strong".

    And Takeshi Minami, the chief economist at Norinchukin Research Institute, told Reuters that "China's economy is doing better than other countries mostly because of government spending".

    "But like Japan, China's economy is driven mostly by exports, so unless we see a stable pickup in global demand its recovery will be limited.

    "That bodes ill for Japanese companies," Minami added.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    How Moscow lost Riyadh in 1938

    How Moscow lost Riyadh in 1938

    Russian-Saudi relations could be very different today, if Stalin hadn't killed the Soviet ambassador to Saudi Arabia.

    Interactive: Coding like a girl

    Interactive: Coding like a girl

    What obstacles do young women in technology have to overcome to achieve their dreams? Play this retro game to find out.

    The War in October: What Happened in 1973?

    The War in October: What Happened in 1973?

    Al Jazeera examines three weeks of war from which both Arabs and Israelis claimed to emerge victorious.