Picture: ISTOCK
Picture: ISTOCK

Tokyo — Japan’s exports grew for the 14th consecutive month in January, led by brisk shipments of China-bound hybrid cars and electronics parts, a sign that solid global demand for Japanese goods continued to underpin growth in the world’s third largest economy.

Ministry of finance data showed on Monday that exports grew 12.2% in January from a year earlier, following a 9.3% year-on-year gain in the previous month. The result handily beat a 10.3% increase expected by economists in a Reuters poll.

Economists expect exports will continue to expand in the coming months, led by demand for the semiconductor-related products that boosted exports in 2017.

Analysts are also wary about a rising yen as well as the US stance towards protectionism ahead of the midterm elections later this year, and potential effects on Japan’s exports of cars and other products.

A strong yen erodes profits at Japanese manufacturers and could hurt the otherwise buoyant economy, which posted an eighth consecutive quarter of growth in October-December.

In a sign the yen’s strength has undermined business sentiment, confidence among Japanese manufacturers worsened significantly in February from January’s strong reading, the Reuters Tankan poll showed on Monday.

Monday’s trade data showed exports to China, Japan’s biggest trading partner, jumped 30.8% year on year in January led by semiconductor production equipment, car engines and hybrid cars.

Shipments to Asia as a whole, which account for more than half of Japan’s exports, grew 16.0% in the year to January.

US-bound shipments rose 1.2% in the year to January, led by steel, batteries and medicines, while car shipments declined 3.9%. The small rise in US-bound exports followed a 3.0% gain in the previous month.

Japan’s trade surplus with the US fell an annual 12.3% in January to ¥349.6bn, a second declining month. Overall imports rose 7.9% in the year to January, versus the median estimate of an 8.3% increase.

The trade balance came to a deficit of ¥943.4bn ($8.87bn), versus the median estimate of a ¥1-trillion deficit. It marked the first trade deficit in eight months.