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

(Bloomberg) -- 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.

Key Takeaways

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.

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