Japan's annual exports jump most since late 2013 in boost to economy

Wed Feb 18, 2015 10:24pm EST
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By Tetsushi Kajimoto and Mari Saito

TOKYO (Reuters) - Japan's annual exports in January jumped the most since late 2013 in an encouraging sign a weak yen is finally boosting the nation’s all-important export engine and helping the economy crawl out of recession.

The 17.0 percent year-on-year gain in exports marked the fifth straight month of increase, supported by shipments of cars to the United States and of electronics parts to Asia, data by the Ministry of Finance showed.

Ministry officials say exports are on a firm footing, adding that special factors helped boost shipments such as a rebound from last year's Chinese New Year holidays which fell in January, and extreme cold weather which hit the U.S. economy a year ago.

A pickup in shipments - which had been a soft spot in the economy - is welcome news for policymakers who hope exports will offset still-weak private consumption, and cheaper oil prices will spur firms to spend more on wages and investment, generating a virtuous growth cycle.

And with the economy recovering at a subdued pace after slipping into recession last year, stronger exports growth would let the central bank hold off on any additional stimulus.

Bank of Japan Governor Haruhiko Kuroda said on Wednesday he saw no need now to expand monetary stimulus as the bank raised its view on output and exports and stuck to its assessment that the world's third largest economy is recovering moderately.

"The BOJ will wait to see how oil prices may impact people's deflationary mindset, and brisk trade data will encourage Kuroda to stand pat on policy for the time being," said Takeshi Minami, chief economist at Norinchukin Research Institute.

A jump in export volume suggests that Japanese exporters who have gained hefty profits due to a weak yen are lowering exporting prices to boost shipments, Minami added.   Continued...

A container ship is loaded at a port in Tokyo December 17, 2014. REUTERS/Thomas Peter