UPDATE 1-Japan exports pick up, recovery likely slow

* Annual export growth accelerates in November

* Acceleration is first time in 9 months

* Chinese monetary tightening, euro-debt crisis pose risks
(Adds details, economist’s quote, graphic)

By Kaori Kaneko

TOKYO, Dec 22 (BestGrowthStock) – Japan’s export growth picked up in
November for the first time in nine months due chiefly to the
yen’s pullback from 15-year highs, but analysts say signs of
softening overseas demand cloud the outlook.

Uncertainties about overseas economies bode ill for the
Japanese government, whose fiscal policy options are limited due
to a self-imposed cap on new borrowing for the year starting next
April. The government is set to compile the 2011/12 budget this
week.

Economists expect export growth to resume slowing towards the
first quarter of next year but to regain strength later on demand
from emerging economies.

This outlook is not assured, however, given a weak U.S. job
market, Europe’s debt problems and China’s policy tightening
aimed at staving off potential asset price bubbles.

“As the global economy is clearly slowing, although it is not
deteriorating, Japan’s annual export growth may turn flat in
January-March, which will weigh on the economy’s growth,” said
Takeshi Minami, chief economist at Norinchukin Research Institute
in Tokyo.

“But even if the Japanese economy’s slowdown and downside
risks become more evident early next year, the government could
hardly do anything about it, with little room left to boost
fiscal spending.”

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Graphic of export growth http://link.reuters.com/vyz23r

Exports by destination http://link.reuters.com/wyz23r

More stories on the Japanese economy [ID:nECONJP]

Trade data tables:

http://www.customs.go.jp/toukei/info/index_e.htm

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UNCERTAINTIES OVERSEAS

Exports rose 9.1 percent in the year to November, less than
economists’ median forecast for a 10.0 percent rise. Imports
increased 14.2 percent from a year earlier against an expected
annual rise of 9.0 percent. [JPEXPY=ECI] [JPIMPY=ECI]

Exports to China, the biggest destination for Japanese goods,
rose 18.3 percent in November from a year earlier, faster than a
17.6 percent annual rise in October.

Shipments to Asia rose an annual 13.0 percent in November,
also faster than an 11.3 percent annual rise in the previous
month.

Exports to the United States slowed to 1.2 percent annual
growth in November from 4.7 percent in the year to October.

Uncertainties about overseas economies bode ill for the
Japanese government, which is struggling to keep a self-imposed
cap on new borrowing for the year starting next April even as
welfare costs rise.

Japan’s economy is expected to have contracted in the fourth
quarter as soft exports and an expiry of government stimulus
dented factory output. [ID:nLDE6BD0VH]

The Bank of Japan eased its policy further in October by
pledging to keep rates virtually at zero until an end of
deflation was in sight and launching a 5 trillion yen ($60
billion) scheme for buying government bonds and corporate debt.
It kept the policy unchanged at a rate review on Tuesday.

The trade balance came to a surplus of 162.8 billion yen,
down 55.4 percent from a year earlier. That compared with the
median forecast for a 450.0 billion yen surplus. [JPTBAL=ECI]
($1=83.73 Yen)
(Editing by Edmund Klamann)

UPDATE 1-Japan exports pick up, recovery likely slow