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UPDATE 2-Japan export growth slows, maintains policy pressure on Abe
December 17, 2014 / 4:12 AM / 3 years ago

UPDATE 2-Japan export growth slows, maintains policy pressure on Abe

* Nov exports +4.9 pct yr/yr vs f'cast +7.0 pct
    * Policymakers hope exports to offset weak domestic demand
    * Falling oil prices ease trade gap; govt wary of risk
aversion

 (Recasts, adds analyst quote, detail)
    By Tetsushi Kajimoto
    TOKYO, Dec 17 (Reuters) - Japan's exports grew for a third
straight month in November from a year earlier, but much more
slowly than expected and despite a sharp fall in the yen,
maintaining economic policy pressure on Prime Minister Shinzo
Abe days after his ruling coalition's big election win.
    The 4.9 percent rise in exports was much weaker than a 7.0
percent gain seen by economists in a Reuters poll, slowing from
a 9.6 percent gain in October, Ministry of Finance data showed.
    Weakness in exports could compound April's sales tax rise
which pushed the economy into a recessionary second quarter of
contraction through September.
    Abe's ruling coalition won snap elections at the weekend,
giving the prime minister a fresh mandate to implement his
"Abenomics" reform of monetary and fiscal stimulus, combined
with structural reform.
    Falling oil prices add to the murky outlook, prompting a
warning from a top government spokesman about a possible risk
aversion spreading to financial markets.
    Analysts say the slowdown followed a jump in October exports
from one-off factors such as the delivery of ships to Singapore,
arguing that exports should remain steady - backed by a U.S.
recovery that helps boost output in Asia and Japan.
    "Exports are still seesawing," said Takeshi Minami, chief
economist at Norinchukin Research Institute. "Falling oil prices
will benefit importing nations, but we should also be aware of
the fact that they stem from anxiety over the global outlook."
      The data followed the Bank of Japan's key tankan survey,
which showed business confidence barely improved in the fourth
quarter, suggesting a slow climb out of recession despite gains
in share prices and a steep fall in the yen. 
    The yen hovered below 117 yen to the dollar on
Wednesday, after it hit a 7-year low of more than 120 earlier
this month, down about 10 percent since the BOJ's shock
expansion of monetary stimulus on Oct. 31. The BOJ is expected
to stand pat at a monetary policy meeting on Friday.
    Exports to the United States rose 6.8 percent in the year to
November, while shipments to China rose just 0.9 percent,
slowing sharply from an annual 7.2 percent gain in October.
    Exports to Asia, which account for more than half of
Japanese shipments, grew 5.8 percent in the year to November,
slowing from a 10.5 percent jump in the previous month. EU-bound
exports fell 1.3 percent, the first fall in 18 months.
    Overall imports fell 1.7 percent in the year to November due
to falling oil prices, versus a 1.7 percent gain expected. That
helped trim a trade gap by 31.5 percent from a year ago to 891.9
billion yen ($7.64 billion), but still marking a record 29-month
run of deficits.
    Export volume fell 1.7 percent in the year to November, the
first annual drop in three months. Japanese shipments have
struggled to pick up because companies have moved much of their
production overseas, limiting the gains from a weak currency. 
    ($1 = 116.8000 yen)

 (Editing by Eric Meijer)

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