Japan’s Export Recovery Stretches to 12th Month in November

Japan’s exports grew for a 12th straight month in November, topping economists’ expectations, as external demand continued to fuel the nation’s longest stretch of economic growth since the 1990s.

A yearlong recovery in exports has kicked Japan into higher gear, fueling record profits and rising capital spending during the longest economic expansion since the mid-1990s. Confidence among the nation’s large manufacturers has reached the highest level in a decade, while sentiment is rising even among smaller companies. The wage growth needed to drive a self-sustaining recovery remains elusive, though, even as the labor shortage intensifies, prompting the government to plan to offer tax benefits to encourage higher pay.

Economists’ Views

“We can expect exports will remain strong enough to lead Japan’s economy, with solid demand from U.S. and China,” said Norio Miyagawa, a senior economist at Mizuho Securities Co., who cited global demand for semiconductors and IT-related goods.
“Without any sign of weakening in exports, Japan’s economy will probably keep recovering gradually,” Miyagawa said. “The BOJ must be gaining confidence in the economy with today’s export data.”
The November data confirm the strength of global demand after signs of softening in October, said Atsushi Takeda, an economist at Itochu Corp. in Tokyo. “The general trend hasn’t shifted a great deal from last month, but the positive aspects are clearer with this month’s data,” he said.

Other Details

Japan’s adjusted trade balance showed a surplus of 364.1 billion yen (forecast 265 billion yen).
Exports to China, Japan’s largest trading partner, rose 25.1 percent from a year earlier.
Those to the U.S. rose 13 percent.
Shipments to the EU rose 13.3 percent.
Exports of semiconductor machinery rose almost 55 percent.
Source: Bloomberg