Japanese Exports Fall at Slower Pace as Slump Eases...

This one's for you, BLSH!


Japanese Exports Fall at Slower Pace as Slump Eases

By Jason Clenfield and Kyoko Shimodoi

July 23 (Bloomberg) -- Japan’s exports fell in June at the slowest pace this year as demand picked up worldwide, helping the trade surplus widen for the first time in 20 months and setting the stage for an economic recovery.

Shipments abroad declined 35.7 percent from a year earlier, after dropping 40.9 percent in May, the Finance Ministry said today in Tokyo. The surplus widened to 508 billion yen ($5.4 billion).

Faster growth in China is propping up sales for Japanese manufacturers including Komatsu Ltd. and Nissan Motor Co. The recovery in shipments from the record collapse spurred by the financial crisis probably helped the economy grow for the first time in more than a year last quarter.

“There’s no doubt China has been a driving force for Japan’s exports,” said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo. “Manufacturers will probably continue to increase production amid the improvement in exports, and that’s good for the economic outlook.”

The Bank of Japan last week raised its assessment of the economy for a third month, citing rebounds in trade and factory production. “Economic conditions have stopped worsening,” the central bank said.

The yen traded at 93.69 per dollar at 10:08 a.m. in Tokyo from 93.59 before the report was published. The Nikkei 225 Stock Average fell 0.1 percent to 9,711.14.

Economists predicted exports would decrease 35.1 percent. From a month earlier, shipments rose 1.1 percent.

Economy Grows

Analysts surveyed by Bloomberg predict the world’s second- largest economy expanded an annualized 2.4 percent in the three months ended June 30, growing for the first time in five quarters. Gross domestic product shrank a record 14.2 percent in the previous three months.

Demand picked up in all regions. Exports to China fell 23.7 percent last month from a year earlier, the smallest drop since October. Shipments to the U.S. declined 37.6 percent, the least since December, and sales to Europe slid 41.4 percent, also the best this year.

The International Monetary Fund said this month the global economic rebound next year will be stronger than it predicted in April, raising its forecast for world growth to 2.5 percent for 2010 from an April estimate of 1.9 percent.

China, which grew 7.9 percent last quarter, has surpassed the U.S. as Japan’s biggest export customer. Government subsidies to encourage consumer spending and investment in building projects have benefited Japanese manufacturers.

Most Important

“The bottom line is that China’s strong growth will continue to drive Japan’s exports,” said Kiichi Murashima, chief economist at Nikko Citigroup Ltd. in Tokyo. “Exports are the single most important factor for the economic outlook.”

Tokyo-based Komatsu, the world’s second-biggest maker of earthmovers, said last month its sales in China probably beat expectations in the quarter ended June 30. The company expects the market to grow to about 15 percent of total sales this business year, compared with 10 percent in 2008.

Nissan, whose Chinese sales rose 18 percent in the first five months of the year, will have to increase shipments of engines and transmissions from Japan to feed higher output at its factories in Guangzhou and Hubei, according to Tokyo-based spokeswoman Pauline Kee.

Japan will still need demand to pick up from the U.S. and elsewhere because about half of Japan’s exports to China are parts and materials used to make products that are re-exported, according to Nikko Citigroup’s Murashima.

“About half of Japan’s export to China eventually go to other industrial countries after assembly,” Murashima said. “So we’re a bit cautious about connecting the strength in Japan’s exports to China to resilience in total exports and the overall economy.”

The central bank will release a report later today showing trade volumes on a month-on-month basis, data which correlates closely with the export component of GDP, according to London- based Capital Economics Ltd.

http://www.bloomberg.com/apps/news?pid=20601068&sid=a0iVK98U_vKo

http://econompicdata.blogspot.com/2009/07/china-accounts-for-20-of-all-japanese.html

 

japan interests me as it has a good labour force and manufacturing abilities. to me they are in the best position for recovery due to these factors. i feel western countries are less likely to recover regardless of financial situations due to the apathy of the work force and the cushy lifestyle and culture they have developed. in short economics is not just the problem in the west. in the east it is a different story.

long term investment perhaps.

 

Hmmmm, I would have to strongly disagree with you here...

The public sector is technically bankrupt (negative net worth); debt to GDP is arnd 180%; about 23% of general account expenditure goes towards debt servicing; the demographic situation is so terrible everyone and their mother has been writing about it; and, finally, the politics are a complete mess (since the 80s an avg prime minister lasts arnd 2 years, with the single exception of Koizumi, and we know how that fairy tale ended). I could give you more startling facts about modern Japan, but I think the above should be sufficient.

So, in the long term, I wouldn't be an investor...

 

Niall Ferguson just did an awesome documentary on 'The Ascent of Money' on Japan proving it's a broke welfare state.

I'll try to post the video when I find it.

Japan has serious problems, and is now trying to transition from a welfare state to a less socialistic one.

The irony is that we're moving in the opposite direction, with no national savings (in fact, with massive debt), unlike Japan.

 

i admit the figures aren't that good. i did state financial situation aside. in the west people's attitude to work is not good so even if there was no financial problem there would still be a problem. this is not so much the case in the east.

however you did make a good point about the demographic. which although may be worse than western countries is something we all face.

the point being nowhere is a good investment at the moment.

 

I am bullish on South Korea, in terms of their underlying economy, demographics and national skill level.

If the North Korean geopolitical problem is resolved, South Korea will take off like a rocket.

 

Did you catch the brawl in South Korean parlement last week?



http://www.youtube.com/watch?v=bvUTu99CHEo

link fixed.

 

yes but that is a big if. what about taiwan.

 

I think Taiwan is going to be restrained from its true potential, which there is a lot of, by a menacing China.

I don't think there's much the U.S. can do to keep China from constraining Taiwanese full potential.

 

You know, I actually believe that's a healthy thing.

We have a bunch of slovenly elected officials, fat and happy, who are pretty much useless, for the most part, and who'd never break a sweat like that, because they just don't care enough.