UPDATE 1-Japan export fall casts doubt on trade recovery

* Car shipments rise could be due to inventory buildup

* Economists worry exports not growing due to capex overseas
(Adds details)

By Tetsushi Kajimoto

TOKYO, March 24 (BestGrowthStock) – Japan’s exports fell in February
from the previous month in a sign that a rebound in external
demand could start to slow as the impact of subsidies and
stimulus measures wane.

Exports continued to grow compared with the previous year,
but economists said that growth was likely because firms overseas
are increasing inventories of cars and car parts.

They also warned that shipments of these goods could slow
after a build-up in inventories.

Doubts about the outlook for exports could be a discouraging
sign for the government as it fans concern that a rapid recovery
in shipments could slow down and weigh on Japanese growth.

A healthy economy is crucial for the Democratic Party-led
government, whose popularity ratings have tumbled ahead of an
upper house election expected in July. But external demand will
likely dictate the course of the economy in the near term as the
country’s debt burden makes new fiscal stimulus unlikely soon.

“I was looking to see if there was a recovery in Japanese
exports of capital goods to the United States related to capital
expenditure, and I didn’t see that,” said Takuji Okubo, chief
economist at Societe Generale in Tokyo.

“Exports are growing due to autos and auto parts. This could
be a build up in inventories, and that likely won’t last long.”
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Graphic on export destinations http://r.reuters.com/nuz84j
Table on government support [ID:nTOE60B098]
More stories on Japan’s economy [ID:nECONJP]
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Exports fell a seasonally adjusted 1.7 percent in February
from the previous month, Ministry of Finance data showed on
Wednesday.

Compared with a year earlier, exports rose 45.3 percent, less
than the median estimate for a 45.7 percent increase.
[JPEXPY=ECI]

Shipments of cars rose 105.0 percent, while shipments of car
parts jumped 121.7 percent from a year ago.

Exports to Asia, which account for more than half of Japan’s
total exports, rose 55.7 percent in February from a year earlier,
slower than a 68.3 percent annual rise in the previous month.

Exports growth to China also slowed to an annual 47.7 percent
rise in February from an 80.0 percent annual gain in January.
Part of the slowdown in Asian exports was because the Lunar New
Year was in February this year, whereas last year the holiday
came in January, economists said.

Shipments to the United States gained an annual 50.4 percent,
versus a 24.2 percent annual rise in January.

The trade balance came to a surplus of 651.0 billion yen
($7.20 billion), compared with the median estimate for a 550.0
billion yen surplus. [JPTBAL=ECI]

Rebounding exports were a major driving force behind Japan’s
economic recovery last year from its worst recession since World
War Two, with shipments to Asia leading the way thanks to strong
growth in the region.

Economists forecast that Japan’s economic growth will slow
down early this year as the boost from worldwide stimulus
spending fades and as the government cuts public works spending.

Members of parliament are to approve on Wednesday a record
92.3 trillion yen budget for the fiscal year starting on April 1.
Japan’s outstanding debts are around twice its gross domestic
product, making it the most indebted country among industrialised
nations.

Stocks

(Reporting by Tetsushi Kajimoto; Editing by Hugh Lawson)

UPDATE 1-Japan export fall casts doubt on trade recovery