Japan’s Export Growth Accelerates to 45.3% on Asia

March 24 (Bloomberg) -- Japan’s export growth accelerated to 45.3 percent in February, led by Asian demand that increased the likelihood the economic recovery will be sustained.

The year-on-year increase was faster than January’s 40.8 percent, the Finance Ministry said today in Tokyo. The median estimate of 17 economists surveyed by Bloomberg News was for a 45.7 percent gain.

More than $2 trillion in worldwide public spending has revived global trade, fueling sales for exporters from Komatsu Ltd. to Mitsubishi Electric Corp. The increase in shipments abroad is improving corporate profits, easing concern domestic demand will slow as the effects of government incentives to buy energy-efficient cars and home appliances wear off.

“Exports are recovering steadily on the back of a pickup in the global economy,” Yoshiki Shinke, a senior economist at Dai-Ichi Life Research Institute in Tokyo, said before the report. “Japan’s economy will likely maintain the recovery trend, led by an increase in exports, even as household spending and public investment are expected to slow.”

Imports climbed 29.5 percent in February from a year earlier, resulting in a trade surplus of 651 billion yen ($7.2 billion). The median estimate of 22 analysts surveyed was for 560.6 billion yen.

The yen traded at 90.38 against the dollar at 8:55 a.m. in Tokyo, compared with 90.40 before the report was released. Exports fell a seasonally adjusted 1.7 percent from January.

Favorable Comparison

The surge in exports was partly due to a favorable year- on-year comparison. In February 2009, shipments abroad tumbled a record 49.4 percent as global trade froze following the collapse of Lehman Brothers Holdings Inc. five months earlier.

The rebound was driven by Asia, especially China, Japan’s largest overseas customer. China’s economy may grow 9.9 percent in 2010, accelerating from 8.7 percent last year, according to a Bloomberg News survey released this month.

Mitsubishi Electric yesterday forecast net income of 25 billion yen in the year ending March 31, reversing its previous estimate for a 20 billion yen loss. The maker of consumer electronics and assembly-line machinery cited increased demand from Asia, global government stimulus measures and cost cuts.

Komatsu’s Sales

Komatsu, the world’s second-biggest maker of large dump trucks and excavators, expects sales in China to climb between 40 percent and 50 percent in the year starting April 1, Kazuhiko Iwata, president of the company’s mining division, said this month.

Recent reports show the export-led recovery is spreading to the domestic economy. The unemployment rate fell to a 10- month low of 4.9 percent in January, bolstering consumer confidence. Service demand rose the most in more than a decade.

The Japanese government last week raised its assessment of the economy for the first time in eight months, saying the recovery is beginning to spur corporate earnings, home building and consumer spending.

Some Bank of Japan board members said they had “shifted slightly upward” their view of the economy because of exports to Asia, February meeting minutes showed yesterday.

Still, the rebound hasn’t been fast enough to shake off deflation, which is squeezing profit margins and discouraging spending. The central bank last week doubled a credit program to 20 trillion yen to help spur consumer prices that have fallen for 11 consecutive months.

“Weak demand is being reflected in continuing price declines,” said Chiwoong Lee, a senior economist at Goldman Sachs Group Inc. in Tokyo. “With the exception of consumer durables, which have support from fiscal policies such as eco points, consumption is lackluster and exerting downward pressure on prices.”