UPDATE 1-Japan export growth slows; yen rise may hurt ahead

(For more stories on the Japanese economy, click [ID:nECONJP])

* June exports up 27.7 pct yr/yr vs f’cast 23.5 pct rise

* Annual export growth slows for 4th straight month in June

* Yen rise impact not seen yet but to hurt ahead -analysts
(Adds details, analyst comment)

By Rie Ishiguro

TOKYO, July 26 (BestGrowthStock) – Japanese exports rose more than
expected in June from a year earlier but the pace of increase
slowed for the fourth straight month, a sign the economic
recovery may lose steam on moderating overseas demand.

While analysts expected export growth to slow from a sharp
rebound in the first quarter, the yen’s recent gains and signs of
slowdown in big markets such as the United States and China have
heightened uncertainty on the outlook for Japan’s export-reliant
economy.

“Exports to China may have peaked for now. Shipments to
Europe and the United States can’t be relied on either. That
means the key will be whether exports to other Asian nations
sustain momentum,” said Takeshi Minami, chief economist at
Norinchukin Research Institute.

“The impact of recent yen rises will appear with a time lag,
so we’ll see it affecting exports in the coming months. I think
the impact will be pretty significant.”

Exports rose 27.7 percent in June from a year earlier, more
than a median market forecast for a 23.5 percent increase, trade
data from the Ministry of Finance showed on Monday. [JPEXPY=ECI]

But export growth slowed for the fourth straight month after
peaking in February, when it rose 45.3 percent, boding ill for an
economy heavily reliant on overseas demand.

Shipments to Asia, which account for more than half of
Japan’s total exports, rose 31.7 percent in June from a year
earlier but that still represented a slowing for the fifth
straight month.

Exports to China rose 22.0 percent from a year earlier, also
marking the fifth straight month of slowdown.

Japan’s economy expanded 5 percent in the first quarter of
this year after emerging from recession last year, driven by
solid exports to fast-growing emerging Asian nations.

But some analysts warn that the yen’s appreciation may hurt
exports by reducing the competitiveness of Japanese goods sold
overseas, and therefore prompt the Bank of Japan to loosen
monetary policy further.

“One of the worries for Japan’s economy at the moment is the
yen’s appreciation. If the yen firms rapidly it could raise
concerns about Japanese companies’ profits, thus stocks would be
expected to fall,” said Tatsushi Shikano, senior economist at
Mitsubishi UFJ Morgan Stanley Securities.

“If the yen firms and stocks fall sharply, the Bank of Japan
may have to take some measures.”

Stock Analysis
(Editing by Michael Watson)

UPDATE 1-Japan export growth slows; yen rise may hurt ahead