UPDATE 3-Japan exports to US offset slower exports to China

* Overall exports down month/month for 1st time in a year

* Exports post third-biggest annual gain on record

* China-bound shipments slow due to Lunar New Year

* Exports to all regions up for 1st time since Aug 2007

* Car exports rise may be due to inventory build-up -analyst

By Tetsushi Kajimoto

TOKYO, March 24 (BestGrowthStock) – Japan’s exports fell slightly in
February, but a big rise in auto shipments to the United States
showed exports are continuing to pick up on the back of a
recovery in the global economy.

Exports to the United States jumped 50 percent from a year
earlier, and analysts calculated that U.S.-bound exports also
posted a double-digit gain in seasonally adjusted, month-on-month
terms.

Overall exports slipped 1.7 percent — the first fall from
the previous month in a full year, as the Lunar New Year in Asia
fell in February this year instead of January last year,
resulting in slower growth in exports to China, which is now
Japan’s No.1 export destination.

“The figures overall underline the view that exports are on
an uptrend, and the trend may well have strengthened,” said Yasuo
Yamamoto, senior economist at Mizuho Research Institute.

Brisk demand in the world’s biggest economy also helped South
Korea’s exports to the United States post their biggest annual
gain since 2007. [ID:nSEW002183]

External demand will likely set the course for Japan’s
economy in the near term as national debt is almost twice the
size of the economy itself, making new fiscal stimulus unlikely
soon.

The numbers also helped to alleviate some concerns that
Toyota Motor Corp’s (7203.T: ) massive global recall would have a
big impact, although analysts said those worries as well as
concerns about the pace of growth in China remain.
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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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Compared with a year earlier, exports rose 45.3 percent led
by auto shipments to the United States and electronics parts to
Asia. It was the third-biggest annual gain on record and in line
with a median forecast for a 45.7 percent rise. [JPEXPY=ECI]

Shipments to all regions grew for the first time since August
2007.

A finance ministry official said that while exports were
recovering, they were still only 70 percent of the average level
seen in the year to August 2008, just before the collapse of
Lehman Brothers triggered a global recession.

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

Japanese steelmakers, including the world’s No.2 Nippon Steel
Corp (5401.T: ) and No.6 JFE Holdings Inc (5411.T: ), have ramped up
production to meet strong demand in Asia and from domestic
carmakers. [ID:nTOE62H030]

Still, some economists attributed those rises to a build-up
in car and car part inventories by overseas automakers which had
let their stocks deplete amid the global economic slowdown,
adding that shipments of these goods could soon slow.

“Exports are growing due to autos and auto parts. This could
be a build up in inventories, and that likely won’t last long,”
said Takuji Okubo, chief economist at Societe Generale in Tokyo.

Signs that the recovery in exports could slow could hurt the
Democratic Party-led government, whose popularity ratings have
tumbled ahead of an upper house election expected in July.

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

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 rise in the previous month.

Growth in exports to China also slowed to an annual 47.7
percent rise in February from an 80.0 percent gain in January,
while shipments to the United States gained an annual 50.4
percent, versus a 24.2 percent 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]

Investment

($1=90.45 Yen)
(Reporting by Tetsushi Kajimoto; Editing by Edwina Gibbs)

UPDATE 3-Japan exports to US offset slower exports to China