Japan export grew in October

The Japan export grew in October with its fastest pace in the last eight months, sending an encouraging sign of improving global demand. The Japan export grew by 9.6% yoy. The level exceeds more than double the forecast of experts polled by Reuters for growth of 4.5% after rising 6.9% in September. The imports rose by 2.7% compared to the same period last year, remained below expectations for expansion of 3.4% after rising 6.2% in September. Thus the Japanese trade deficit dropped to 710 billion JPY in forecasts for 1.05 trillion JPY. In September the rate was 958.3 billion JPY.

Japan became among the major exporters again after the very strong data in September and this is becoming a trend. The main reason is that local exporters finally realize that the yen will remain weak for a long time and is now moving towards the long-term demand, especially in Asia. They expand their export markets, which obviously helps significantly to economy, commented analysts.

The exports to Asia, which accounts for more than half of the Japanese supply grew by 10.5%, driven by demand for metals and auto parts in China, and computers in Asia as a whole. The prospects for Japanese exports ca in the spotlight recently after the momentum has slowed in recent months despite the weak yen, which makes Japanese goods more attractive to foreign companies and consumers.

Japanese economy shrank by 1.6% yoy in the third quarter fall into technical recession after falling by 7.3% in the second. The results prompted Prime Minister Shinzo Abe to delay for 18 months the planned second increase in the sales tax, originally scheduled for October 2015 and call for early elections in December.